HMRC ‘suggests’ consumers might like to boycott certain tax avoiding retailers

8 November 2012

dump_starbucksWe’ve all heard about Starbucks by now. And Amazon, and Facebook and Google and IKEA- the list goes on. No-one is suggesting that these retailers are doing anything illegal, but they are paying less tax in the UK than they could do. Than some think they should do.

Of course, the retailers themselves argue that it would be ludicrous for them to pay extra tax that they don’t have to- after all that does not make good business sense. But in times of austerity where perhaps a number of us would rather pay less tax, but we don’t have the wealth and power not to, people power could be making a comeback.

UK Uncut is one such group trying to rally and assemble disgruntled members of the public, and its recent demonstration in London meant that some Starbucks branches had to be protected by the police force, the costs of which they had not contributed towards (or not much anyway). Business analysts reports are full of graphs detailing the steep drop in public support for the Starbucks brand after publication of the Reuters report that showed McDonalds as a more (tax) responsible company.

But is this all aimless chuntering? While commuters may complain about Starbucks’ behaviour, are they still getting their double toffee latte fix from their local branch on their way into work in the morning? Surely the only way to really express customer dissatisfaction with unsporting behaviour is to refuse to buy their products and hit them where it hurts.

And that is exactly what the Chair of HMRC, Lin Homer, has been ‘suggesting’ people do. Rather than amending the tax rules to prevent this kind of legal behaviour, she has told MPs that consumer choice could be ‘helpful’ in encouraging firms to pay more tax, and be more socially responsible.

"The field of corporate social responsibility is a relatively new area. We are beginning to see some evidence that taxpayer opinion is altering the behaviour of firms and individuals, and that's actually a helpful thing for HMRC,” she said, noting the irony pointed out by MPs that there is still £32billion in uncollected tax from big business outstanding from last year.

It seems HMRC is hoping that people power could do their job for them, as Ms Homer continued: “It may well be the pressure of public opinion will cause some companies to be more explicit than the annual accounts require them to be about their tax strategy. Do the people who invest in you and buy from you know about your tax strategy?”

Of course, tax law, particularly in respect of big business is a delicate balancing act, which is why the UK rate of corporation tax continues to fall despite our economic slump. If Starbucks were forced to pay UK tax, the argument goes, they would just pack up and leave, taking all those lovely jobs with them.

But is that really true? Would they really ignore the massive UK market over what essentially boils down to an additional operating cost?

And for once it seems that HMRC and UK Uncut are in agreement- if you, the consumer, decides not to buy coffee from a particular retailer, that particular retailer may just decide it would rather pay tax than lose its entire UK market.

So with  HMRC claiming people power as more effective than their own rules, it seems corporate tax bills may, therefore, come down to how far the public can actually be bothered.

[Telegraph]

TOPICS:   Technology   Social Media   Tax

15 comments

  • BS
    Asking the public to boycott is stupid and won't work. Change the loopholes so that they can't do it in the first place. They are just lazy or actually don't want things to change and this is their way of giving lip service to it.
  • Michael
    Alternatively, can we boycot HMRC until they realise that it is their "social responsibility" to, you know, actuallyn collect tax rather than write it offer over lunch?
  • Ian
    Fucking HMRC. They're quick enough to chase me over a couple of quid underpayment but perfectly happy to allow Vodafone to dodge millions in unpaid tax. No wonder the country is facing continual shortfall, when these stupid cunts cannot adequately perform the main duty for which they exist.
  • Hello
    but they are paying less tax in the UK than they could do Why do bw keep publishing these stories? Have I missed the one about Dry Tinder Ltd and how much they pay? Maybe people should stop lining their pockets too.....
  • mikeypop
    ...some Starbucks branches had to be protected by the police force, the costs of which they had not contributed towards (or not much anyway)... You say that as if it is Starbucks' fault that the extra protection was required? By all means protest (peacefully) and lets sort out this mess of a tax system with it's countless loopholes, but it's a bit odd to blame Starbucks for extra policing cost when it is UK Uncut's actions that cause the issue.
  • jimbob
    a strange one from HMRC, shall we boycott paying tax as the chief resides in guernsey for personal tax purposes. tax rules governing the UK are based on old law, that has created the current situation. Starbucks may not pay corporation tax in the UK, but they must pay NI (Ers),Income tax, VAT etc and they create jobs.
  • chewbacca
    @Hello The first rule of dry tinder is don't talk about dry tinder...! For all those wondering what the cryptic comments are, basically this sites owners, HUKD have based themselves in Canada to try and dodge taxes. Oh, and there's the small matter of storing peoples personal information against DPA rules. Oh yes, and sacking HUKD mods in an attempt to silence dissenters, and reduce the wage bill to make the site more attractive to potential buyers. Oh, hai Paul Nikkel, fancy addressing these points? I wonder how long this post will last...
  • PlatinumPlatypus
    jimbob, NI, Income Tax and VAT are not paid by Starbucks, they are paid by employees and customers.
  • Marky M.
    @ Chewbacca Yeah, well let's not piss on our chips by criticising HUKD too much, in case Nikkel takes his ball home to Malta/Seychelles/Canada. Where would we all go for our daily fun and scurrilous comments then, eh? ...oh yeah: Anorak, Huffington Post and Gawker, from where most of these posts are copied anyway.
  • jt
    I don't see any evidence of people boycotting Starbucks here. It's not like there aren't ample other coffee shops within spitting distance for them to make the boycotting easier. A tourist confused me the other day and asked me for directions to the nearest Starbucks. In a panic I accidentally directed them to the one 0.5m further away than the nearest one.
  • Dick
    Everyone else should boycott Amazon to teach them a lesson about paying UK tax. Although I will keep using them as they are often cheaper than the alternatives.
  • DragonChris
    Consumer choice? BWAHAHAHAHAHAHAHAHAHA. Yes, boycott the companies who avoid tax but offer the lowest prices (e.g. Amazon) and pay MORE at a competitor who also pays more tax. I bet the HMRC are devastated at the prospect of getting more tax money. I'll continue shopping at Amazon, thanks. Government - fix the damn country.
  • badger
    Amazon = American company, low prices and good service. Avoids taxes. Vodafone = British company, prices the same as the competition, often pitiful service. Avoids vastly more taxes. I know who I'd rather see suffer.
  • Gabriella
    No wonder this country is in a mess with idiots like this in charge of the Inland Revenue. Why should the public do the job she is paid to do. Change the law and tighten up on tax avoidance. They go after benefit fraudsters like no one's business, isn't tax avoidance by individuals or companies as bad if not worse than this.
  • Mustapha S.
    Of course they wouldn't fucking leave. Sure, they might prefer to pay £50k on £1m than £220k, but only a fucking retard would turn down £780k profit. And gabriella - no this isn't worse than benefit fraud, benefit fraud is ILLEGAL, this isn't.

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