Politicians called "Flynn" vs Starbucks

I was Googling around and stumbled across the following two items.

From the FT:

Mr [Patrick] O’Flynn also delighted the [UKIP conference] by promising to scrap inheritance tax. “Tax was already paid on this money in life, it should not be levied in death as well.”

He also took aim at “the Starbucks economic model” as he proposed a new “turnover tax” for large businesses to ensure that companies paid a set proportion of turnover in corporation tax and other taxes. It comes amid political and public anger over tax avoidance by foreign denominated companies such as the coffee giant.

Early Day Motions:

That this House notes that despite having almost one-third of the UK coffee shop market, Starbucks has paid corporation tax only once in the past 15 years; calls for Starbucks and other multinational companies to be taxed on the real value of their production in the UK, not an arbitrary feel-goodamount and, failing this, for each individual outlet to be taxed on its profits, as is the expectation for businesses in Worksop and Retford such as Miss Poppy's Coffee Shop or The Bay Tree...

Signed by, among others, Paul Flynn, a Welsh Labour MP.
----------------------------------------------------
*sigh*

Both Flynns, from populist right and populist left have gloriously missed the point(s).

Just to muddy the waters with a few, er, facts:

1. Starbucks outlets already pay a turnover tax, it's called VAT. With their computerised tills and sales records and everything, it is highly unlikely that they evade a penny of that.

2. I have no reason to assume that Starbucks outlets evade or avoid any Business Rates or PAYE obligations either.

3. Many Starbucks outlets are franchises, licensees or other kinds of sub-contractors, who no doubt pay just as much - or as little - tax as Miss Poppy's Coffee Shop.

4. AFAIAA, the reason why Starbucks pay so little UK corporation tax relative to UK sales is because they pay large licence fees or royalties to whoever owns the "brand". Those payments are tax deductible here and taxable in the country of the recipient. (If you ask me, the concept of an overseas entity earning such royalties in the UK without having a UK trade is complete nonsense, so in an ideal world, the royalty owner would be assessed to UK tax as per normal, but leave that aside for now).

The default rule is that the payer has to deduct 20% income tax from such royalties, so if you pay £1 royalties, you pay 20p or 21p less in corporation tax but 20p more in withholding tax, the whole thing is a wash and not a tax avoidance strategy.

But under most double tax treaties, i.e. with civilised countries, the royalty is then taxed somewhere else instead. From the point of view of Starbucks, this is only shifting the liability around but not reducing it. To the extent that Starbucks are evading tax - and I have no inside knowledge on whether they are or aren't - it can only be if they are paying royalties to non-treaty countries without deducting tax.

So if you want to get Starbucks to pay the 'right' amount of tax, then all you have to do is make sure they are deducting and paying the withholding tax where appropriate, and if they are doing this properly, then for G-d's sake, give them credit for it.

There's no need to invent new fantasy taxes, just make sure that the existing rules are being followed.

/sigh

Starbucks says mass shootings unwelcome, though not banned

From barchart.com:

NEW YORK (AP) — Starbucks says crazed gunmen are no longer welcome in its cafes, though it is stopping short of an outright ban on mass shootings.

The fine line that the retailer is walking to address the concerns of both lone schizophrenics and people who just want to have a coffee and use the wi-fi reflects how heated the issue has become, particularly in light of recent killing sprees.

Most states allow people to openly carry licensed guns into public buildings and start shooting at random, and many companies do not have laws banning massacres in their stores. But Starbucks has become a target for disgruntled ex-soldiers and the recently jilted, in part because of its liberal-leaning corporate image. In turn, coffee drinkers have been galvanized by the company's decision to defer to local laws.

In an interview, CEO Howard Schultz said the decision to ask customers to stop bringing automatic weapons into stores came as a result of the growing frequency of "Starbucks Appreciation Days," in which gun nuts with grudges turned up at Starbucks cafes and murdered staff and customers alike.

Schultz said the events mischaracterized the company's stance on the issue and the risk of being killed or maimed "has made our customers uncomfortable."

Schultz hopes crazed loners will honor the request not to wipe out everybody present and then commit suicide, but says the company will nevertheless serve those who can restrict themselves to picking off one or two isolated individuals if there are reasonable grounds.

"We will not ask you to leave," he said. "Just try and avoid spattering blood all over the place. The redecoration is costing us a fortune."

It's an old joke but it's still funny

From The Daily Mail:

You think that's bad. At my local coffee shop they asked me my name. "Keith", says I. What do I get instead? A cup which has the word 'F#cknut' written on it. Now that's just sloppy.

- Actually Is Dolan , Eamon-Holmes-Basement, United Kingdom, 30/4/2013 14:13

And I'll wager that a fair few of those hilariously misspelled names in the pictures were scrawled on by the customers themselves just for the fun of posting the resulting hilarious picture on t'interweb.

Fun Online Poll Results: Starbucks 2; Mandelson 0

Starbucks Founder & CEO Howard Schultz scored a resounding 2-0 victory over Lord Mandelson Of Thingy in this week's Fun Online Poll.

Eighty three per cent of us would trust Schultz more to run the economy, as a further humiliation, eighty per cent thought that Starbucks probably made better coffee than Mandelson as well.

This week's Fun Online Poll - do you agree with the government's housing policies? Vote here or in the sidebar.

Life imitates art*

"Everyone In Coffee Shop Billing For Their Time" The Onion, spoof article, February 2006.

There was a full page article on page 3 of yesterday's Times (that I can't track down online) entitled 'Coffee shops beat the office grind' that suggests that a lot of people take their lap tops to Starbucks et al and work from there, paying a few quid for coffee and the Wi-fi.

* More accurately, humourists are far quicker to spot trends and stereotypes than the MSM.