The political class has done its job well. So brainwashed are the lumpen masses they believe a great victory has been achieved with the news Starbucks has handed over £5m to the Exchequer as a corporation tax payment, with another £5m to follow later in the year – regardless of whether Starbucks makes sufficient profit to incur that liability.
The Daily Wail also does its bit to sow confusion by conflating global earnings with UK tax liability, in a deliberate effort to make Starbucks’ operation here look more profitable than it is so the £5m payment looks much smaller than it should have been.
It is only after eight paragraphs that the detail is shared with readers, some of whom before that had taken to the comment thread to hurl abuse and invective at the coffee chain. What the detail reveals is that (my emphasis in bold):
This year however the European arm of the company has turned a profit. In its most recent trading update Starbucks said operating profit in Europe was $5.2million (£3.4million) for the three months to 25 April, up $12.2million (£7.9million) on an operating loss of $7million (£4.5million) for the same period a year earlier.
Making a liberal assumption that Starbucks’ European (not UK) sales stay consistent for the remainder of the year, the company would be on course to make a profit across the whole of Europe of £13.6m. However, the UK Exchequer will be getting £10m from the company following the campaign of demonisation and public opprobrium led by millionaire politicians like Margaret Hodge, who avail themselves of measures to reduce their own taxes without any shame for their hypocritical behaviour.
That means Starbucks in Europe could end up paying 36.7% of all of its European profits in tax to the UK Exchequer alone.
But reading some of the comments that have been elicited by the Wail’s deliberate effort to obfuscate the facts, it seems that isn’t anywhere near enough! No doubt that is a view held by the extortionists in Westminster, who remain unchallenged about just why they take so much money in tax from this country’s productive sectors.
That there would be consequences was always a given. So the extortion class and the brainless morons, who see businesses as a cash cow to subsidise government bribes, waste and inefficiency, can now take responsibility for the actions Starbucks is now taking to mitigate some of the financial costs of paying grossly excessive sums of money that are not even owed, in order to end the witch hunt:
We are also undertaking measures to make Starbucks profitable in the UK, such as relocating unprofitable stores to more cost effective locations, closing them where that is not possible and placing greater reliance on franchised and licensed stores.
Take a bow, hypocritical, political class rent seekers. Demonising Starbucks will now result in people – typically younger people early in their working lives who already struggle to find employment opportunities – losing their jobs as stores are moved or closed to reduce costs to subsidise this state engineered robbery. Some of those who work directly for the chain with the benefits that go with working for a large employer, will now find themselves working for franchises that typically offer lesser terms and conditions.
These actions could now see tax take from the affected employees reduce and possibly see benefits required to support those who will lose their jobs. Where the state has grown too large, too overbearing and too powerful, these are the things that happen.
I will savour the squeals of protest from those myopic comment thread outrage mongers over at the Wail, when the beast they have helped feed starts to take more from them in the not too distant future. We will doubtless see a very different tune being played when they are on the receiving end of the kleptocracy that refuses to just deliver essential services and infrastructure well, and insists on inserting itself into areas where it has no business, using our money to service its own interests rather than ours.