Many people have been boycotting Starbucks following revelations of tax dodging here in the UK and as a result of public and political pressure, this well known high street coffee brand has agreed to pay £10 million in corporation tax this year, with the promise of another £10 million in 2014.
Although this £20 million from Starbucks seems like a huge amount of money, they have not paid any Corporation tax in the UK since 2009 so this really is a small victory for the UK taxpayer.
Changes To UK Tax Law
Image by Ken Teegardin
It seems quite unbelievable that a high profile and successful business such as Starbucks has been able to tax dodge for quite so long and with £400 million of turnover last year, they should hardly be flying under the radar of HMRC. But like so many of the large businesses in the UK, they employ people to work very hard to find tax loopholes which they can exploit to their advantage.
As a result of the public outcry MPs have decided that forcing these businesses, which include not only Starbucks but Amazon and Google too, to comply with the UK laws around payment of Corporation Tax.
These household names have managed to avoid paying any tax in the UK due to the way they account for their income here. It then appears that they have traded for the year and made a loss, which we all know is just not possible.
What This Means For The Small Business Owner
As the government is clamping down, you should ensure that your business does not face any questions about the corporation tax you are paying, and to ensure that you keep up to date with the changes that are happening as a result of the clamp down by HMRC.
A specialist solicitor will be able to ensure that you are complying with current and planned changes to the tax system and you should take advice as soon possible to protect yourself and your business too.
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