http://www.guardian.co.uk/politics/2013 ... -tax-deals

I'd imagine that's paltry compared to what we were actually owed.

flat rate tax system on ALL companies operating within the UK, regardless of size, @20% of gross. (VAT @20%)
same as VAT, if VAT drops or increases then corporate gross tax revenue drops or increases to the level of VAT.

end of game ...

A flat rate tax system for companies already exists. There is no higher rates for higher profits. Yet they still avoid paying taxes.

Is that before or after any expenses? I’m just thinking of that great coffee nation Switzerland that seems to be able to milk Starbucks in this country absolutely dry, thus avoiding paying any UK corporation tax.

Mind you, they did decide to volunteer some small payment to HMRC, so maybe we should all just tell the government how much we’d be happy to pay instead, rather than a fixed percentage.

There could be ways around it, such as capping any allowances, so that above that they simply have to pay tax regardless. You could abolish interest tax breaks or cap them at a low level. So companies will borrow and then lose the money somewhere to avoid paying tax. Hit transfer payments with a 60% tax rate. Have a unitary tax for multinationals with taxes companies based on their world wide profits. It is the big companies that are avoiding their taxes not the small domestic ones. Just aim your taxes at that group and you will improve tax income.

You want to tax a multinational on world wide profits even if they pay taxes in the countries where they made that profit. How quickly do you want the total destruction of the tax base?
The company I work for basically made no profit in the UK but made all its profits overseas, where it pays the taxes the governments of those countries says it has too. But that sort of idea could easily see 3 thousand direct jobs go in a flash plus a spend in the uk economy of a couple of billion.

I've no wish to see anyone lose their job, but the bare fact is neither of those numbers means anything worth a damn on the scale of the national economy.

Clever accounting means that money gets moved from one territory to another. The Starbucks method is to ensure that Starbucks UK pays “royalties” (ie the rights top use the name Starbucks, use the logo etc.) and buys its ingredients from the central company in Switzerland. As a result, Starbucks in the UK appears to be making no money at all, and therefore pays no tax on this apparent nothing. This is despite the queues in every outlet in the country, with people happily paying up to a fiver for a drink. At some point, Starbucks UK must be seeing a return in its investment here. However, to avoid paying tax it shunts this money abroad to a parent organisation, and writes it off as expenses.

It’s nothing more than an accounting trick to avoid paying tax at our rates. You’ll notice that Starbucks then offered HMRC payments in lieu of tax as a PR exercise. There is something iffy going on.

Note that if I were to start a coffee shop where I live, I’d be subject to taxes, rates, etc., and I’d have no off-shore parent company to act as my tax dodge. The playing field is not level in this respect. If the government wants the strivers to compete in more than a small way, then issues like this needs to be straightened out.

Individually they mean nothing but when that's replicated by all the big companies then the knock on becomes ever larger. As well as the ancillary jobs that go from suppliers etc. Its a simple idea that falls apart even under a cursory inspection

It is called a unitary tax. If they made 25% of their sales here and group profits worldwide were $4 billion but somehow "profits" here were zero, then they would pay 23% taxes on that 25% of profits that could have been made here.

Yes and no. If Starbucks were to exit the UK what would happen? Well since most are franchises the owners of the individual stores would carry on maybe under a new UK based banner or as an independent. They may not lose any staff, as the exit of Starbucks or any other company for that matter would open up the window for a new local entrant. Since the local traders are paying taxes as are the staff the loss of Starbucks would barely impact jobs. If Starbucks decided to recover the "lost profits" through higher coffee prices then the independents would simply buy elsewhere. When many of these companies mention that they pay taxes they are including the taxes paid by the staff in many circumstances. The whole idea of foreigners supporting the economy is smoke and mirrors. If there were opportunities for locals then they would provide the investment. If a foreign company opened up a TV assembly plant somewhere they would probably try and get government grants and rent subsidies, the production would just as easily support jobs overseas as the components are made overseas and imported to be made in a massive tax break arrangement. While the new employees might get paid enough to pay taxes the investor might pay little or nothing in taxes for many years, and overall the benefit to the economy might be marginal. Then they can use transfer pricing to eliminate any profits here.

That would make the UK as attractive for investment as the westboro Baptist church doing a picket at mecca.

It would also open up huge domestic markets that are dependent on fickle overseas investors to local investors.

Anything that would diversify the UK economy a bit would be a good thing IMO. We're too dependent upon the large corporations which gives them too much power.

As to the Starbucks thing, I remember a story I read a while ago. There was a long standing independent coffee shop and then a Starbucks opened on the same street. Everyone assumed the custom would just go to Starbucks - more marketing, familiarity with the product range etc - and the little guy would go out of business. In the end it didn't happen. In the end, he actually got more business. The reasons were complex but there definitely was a factor that being different from the kind of 'all the same, everywhere' was something people actually preferred.

OK, you're not going to be able to just wander in and make a fortune. Without Starbucks back end systems you're going to have to find a supplier for raw materials, you're going to have start up costs, you're going to have to do your own promotion and marketing etc. But if Starbucks pulled out of the UK, people wouldn't stop wanting coffee. The demand would still be there and a savvy business man would find a way to profit from that. I suspect a large portion of that demand would be met by expansion of the other chains like Costa but there would be an opportunity for independent owners to spring up. Would there be as many coffee shops overall? Possibly no, possibly some fewer. Would every Starbucks employee in the UK end up on the dole? Almost certainly not.

The management of the UK Starbucks could go independent under a license and so it would take over the running of the national franchisees. Every exit creates an opening for someone else.