Reply to: Starbucks

[BrilloPad]

Drinking Starbucks in public to become the new ‘defending Jimmy Savile’

[Robinho]

Sales tax is tax on the whole of the sale price, VAT is only on the value added. So there's a slight difference.

[BlasterBates]

Very good post.

Isn't sales tax VAT?

Yes that's right, i.e. put VAT up.

[eek]

Our local bakery chain (Peters) has gone into administration so now Greggs is all that's left. Until Krispy Kreme opens.

There's still Cooplands.

Although we have Robineau's which makes Betty's look peasant class.

[BrilloPad]

I agree with the above you need to place the emphasis of business tax on a sales tax.

I can see that if you were to force corporation tax on turnover rather than profit, that Starbucks would close all their shops and freelance contractors would foot the bill, by paying an additional tax.

Be careful of what you wish for.

Very good post.

Isn't sales tax VAT?

Only other solution I can think of is to introduce exchange controls to stop money leaving the country. Or colonize tax havens. Are their any tax havens with a decent army?

[gingerjedi]

Hahaha Greggs has seen a downturn in sales and it's no longer as cheap as it used to be 64p for a sausage roll, I'll nip to Sainsbury's and buy 4 for an extra 35p

There's 10 in Cardiff.

[BlasterBates]

The fact is if you stopped Starbucks owning it's own coffee shops and using "internal pricing" it would simply shift to the MacDonald's model. Now you may have noticed that MacDonalds isn't on the sharp end, but is MacDonald's any different ? ....no

What MacDonald's do is not setup a it's own business it offers a Franchise. A Franchise is an agreement to allow an independent business to use the MacDonald's name and all it's supply and marketing muscle for a fee. Now you might like to ask yourself how profitable is a franchise. The answer is a franchise hardly makes a profit. Now the Franchisee has full control over what he pays himself how much profit he makes etc etc, but in the end he makes just enough to make a living. So just like freelance contractors they pay virtually no corporation tax, and pay themselves from the Franchise in the most tax efficient manner. MacDonalds (Cayman Islands) receives a huge fee and the Franchisee makes 30 grand (for example).

Now do you see a difference between MacDonalds and Starbucks or even a Freelance Contractor who also pays no corporation tax?

I agree with the above you need to place the emphasis of business tax on a sales tax.

I can see that if you were to force corporation tax on turnover rather than profit, that Starbucks would close all their shops and freelance contractors would foot the bill, by paying an additional tax.

Be careful of what you wish for.

[The Spartan]

Our local bakery chain (Peters) has gone into administration so now Greggs is all that's left. Until Krispy Kreme opens.

There is a Krispy Kreme in Cardiff city centre for the first couple of months that it opened the queues were insane people queued for 45 mins for a friggin' donut. They did 72000GBP the first weekend they were open doubtless to say they're using the say process as Starbucks to avoid tax.

[d000hg]

Our local bakery chain (Peters) has gone into administration so now Greggs is all that's left. Until Krispy Kreme opens.

[The Spartan]

Not as busy as Greggs.

Hahaha Greggs has seen a downturn in sales and it's no longer as cheap as it used to be 64p for a sausage roll, I'll nip to Sainsbury's and buy 4 for an extra 35p

[gingerjedi]

There is a Starbucks everywhere Cardiff city centre has 5 and they're always busy.

Not as busy as Greggs.

[d000hg]

What state pension, old boy?

Gonna be none left when we retire at 80.

Good job I'm not paying then.

[Old Hack]

Whilst I can see what you're saying is indeed true and it is an ingenious idea, it's ludicrous that they can claim that they don't make any profit in the UK.

There is a Starbucks everywhere Cardiff city centre has 5 and they're always busy.

That's the whole beauty of it. They make millions, but their mother ship in the Cayman Islands* charges them millions to use the name, and to use the purchasing department, etc, etc, etc. They can also rustle up a bit of false accounting (allegedly) like most good companies. I love the idea a company can say, "oooh no, that's way too much <insert a particular one> tax, I tell you what, we'll pay you 15% of that ok?" like Vodafone appears to have done. The thought that I would have to spend 3 years in jail or so for saying something like that to Hector amuses me somewhat.

Maybe a few thousand contractors can pool their resources and say fook you hector, we aint paying it, its too high....

Just a joke really

*Other tax havens are available...

[The Spartan]

France does this. But I think they too would suffer what we do, which is the point is, they do have a taxable presence here, and it is liable for tax. However, they don't actually generate any profit, for they have micky mouse charges elsewhere to use their brand name for marketing, etc, etc.

So, effectively, they aren't paying tax, as they don't generate any profit. It's genious really. I think people should create a company in Vanuatua, and then charge the english affiliate an amount, variable year on year, which effectively removes profit from the UK ltd, pay the tax in Vanuatua (5%) and then ship the money home.

Could do it from Ireland too, but pay more or a percentage.

It's actually brilliant, and obviously not illegal. I can imagine a few shiny suited accountants currently thinking about the same thing as a wheeze...

Whilst I can see what you're saying is indeed true and it is an ingenious idea, it's ludicrous that they can claim that they don't make any profit in the UK.

There is a Starbucks everywhere Cardiff city centre has 5 and they're always busy.

[BrilloPad]

Gonna be none left when we retire at 80.

What makes you think you can retire that young?