The Beverage Standards Association (BSA) has hit out at Starbucks and other multinational coffee shop chains that it claims are avoiding paying tax in the UK.
The representative body for the beverage industry is calling for fairer tax rules for its members, including small independent coffee shop businesses, after Starbucks hit the headlines this month for not paying UK corporation tax in the last year.
In a special report by Reuters it was discovered that the international coffee shop giant had only paid £8.6m in taxes on its UK sales since 1998, despite turning over more than £3bn during the period.
Martyn Herriott, chairman of the BSA, said: "Multinationals like Starbucks take advantage of the fact that UK corporate tax is levied on profits, not sales. They are taking the HM Revenue & Customs, small business tax payers and the independent coffee shop for a ride. Our members serve Fairtrade beverages – what about fair tax?
“Following the lead of the Federation of Small Businesses we ask that the government follows two principles when making tax policy – that it is constant and stable and that it is competitive, so that it encourages investment and trade in the UK.”
Barry Cook, owner of Cafelicious in Swindon and a BSA member, said: “Technically it’s legal for these US multinationals not to pay tax, but morally it’s completely wrong. It’s conning the British system. None of us want to pay tax, but we do. It’s very unfair that they do this. It’s a morally incorrect way of doing business.
“As a small business, we get no assistance with business rates and we have to pay the full whack of tax. We have other issues to contend with – big coffee chains operating units that run at a loss to keep out competition, and opening units without planning permission. The rest of us have to stick to the rules. Why shouldn’t they?”