Campaigners against Government cuts staged a protest outside a Preston coffee shop
Members of the Preston Against Cuts group held the protest outside Starbucks’ branch at the Fishergate Shopping Centre over the chain’s failure to pay corporation tax in the UK for the past three years, where it has made £1.2bn sales in the same period.
Mick Mulcahy, spokesman for the protest group, said there was a link between the cuts being implemented across the country.
He said: “People we spoke to recognised the link between tax avoidance and the cuts in public spending we see here in Lancashire - they both give and take from the same public purse.
“It is estimated tax avoidance costs the Government £120bn every year, if we eradicated that, the deficit would be wiped out in 18 months.
“Starbucks are an example but there are plenty of other multi-national companies and wealthy individuals who do exactly the same.”
He added that just 80% of the cuts to public sector spending were yet to take place.
Starbucks chief executive Howard Schultz has defended his company saying it did not pay income tax in the UK because it “does not make any money there.”
He has vowed to work alongside any official investigation into its tax status in the UK.
The American coffee firm - valued at £25 billion - has generated more than £3bn of sales in the UK since 1998, but has paid less than 1% in corporation tax.
Its nearest UK rival, Costa, owned by Whitbread, recorded £377 million sales last year, compared to Starbucks’ £398 million, but its tax bill came to £15 million, or 31% of its profits.
Starbucks, which has more than 700 outlets in the UK, said it has paid its “fair share of taxes” in full compliance with UK law and no authority had suggested otherwise.
The Seattle-based firm is the latest company to come under scrutiny for making a poor contribution to HM Revenue & Customs (HMRC) after Facebook and Google met similar criticism.
A four-month investigation by news agency Reuters discovered that Starbucks was able to cut income tax by paying fees to other parts of its global business, such as royalty payments for use of the brand.
This means Starbucks UK is effectively making a loss and therefore does not have to pay any corporation tax. As a result, it has not broken any law.
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Saturday 18 May 2013
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