UK Uncut, Corporation Tax And The Politics Of Envy

Introduction

On Saturday 8th of December the activist organisation UK Uncut held demonstrations at “more than 40” Starbucks Coffee branches across the UK (44 apparently). UK Uncut have a history of activism against companies it considers to be ‘tax avoiders’. Previous “targets” have included Vodafone, Tesco, Barclays and Boots. UK Uncut has boasted that its goal is to protect the taxpayer-funded public services from cuts that the coalition government have said are necessary to reduce the public deficit. UK Uncut instead states that the shortfall can be met solely by clamping down on ‘tax avoidance’ by large companies.

This article is not going to debate the cuts, nor government claims they are necessary.

The Financial Aspects Of Starbucks ‘Tax Avoidance’

From UKUncut’s downloadable flyer:

“What’s wrong with Starbucks? Plenty. UK Uncut are targeting Starbucks over their tax avoidance, in the last three years they’ve paid no corporation tax at all, despite making sales of £1.2bn.”

Interestingly over four years the Guardian Media Group made comparable revenue (sales) and ‘paid no corporation tax at all’. In fact  the group’s revenue from the four tax years 2009-2012 was £1.1bn. It made a cumulative £237.6m loss over this period and received total tax ‘credits’ of £30.4m (made up of refunds in three of the four years). This is a perfectly legal within UK tax law and would have been approved by Her Majesty’s Revenue and Customs (HMRC).

The flyer continues with this brilliant line: “Because of the way they’ve managed to shift money around inside their global corporate empire…” Empire? Who are they subjegating? Which countries did they invade? Can anyone hear Darth Vader’s theme tune now?

Next they say: “Starbucks has managed to pay no taxes by shifting money around between Starbucks companies in different countries, so that its accounts show it made a loss in the UK. As corporation tax is paid on profits, by recording no profits they weren’t due to pay any tax.”

Firstly: “shifting money around”, that is paying another part of the business for goods or services, in this case coffee beans and brand licensing (intellectual property). I would argue that without the coffee beans or the brand it wouldn’t be Starbucks.

Secondly: “its accounts show that it made a loss”. Correct, it made a loss. “…by recording no profits” – because there were none – “they weren’t due to pay any tax.” Correct – next statement of fact please?

So how do the international business experts at UK Uncut propose to deal with this? “The government can clamp down on tax avoidance by changing the UK’s tax rules to stop companies funnelling millions of pounds of profits out of the UK.” Well, sort of. While the UK government can enact legislation concerning corporation tax profits made here, there exist various tax treaties between countries, including the prevention of ‘double taxation’, that is tax charges being levied on the same profits in two countries of operation.

UK Uncut make this solution sound simple; it’s not. Even Paul Lewis, a financial journalist who frequently reports these tax arrangements on Twitter, has said: “The problem about legislating to stop these cunning cross border tax evoidance (sic) schemes is that it involves multinational agreement.”

Corporation Tax Is Confusing

Even worse, UK Uncut admits it has no idea how much tax is ‘the appropriate amount’. Danni Wright, representative of UK Uncut interviewed by the BBC, was unclear on how much tax Starbucks should be paying.

Interviewer: “How much tax do you think Starbucks ought to be paying? I asked your colleague this earlier and she couldn’t tell me. What, what figure do you think they should be paying?”

Danni: “They should be paying, um, you know, the, the appropriate amount. Part of the problem with the tax…”

Interviewer: “Well they’re paying the appropriate amount within the law, they would argue.”

Danni: “Well that’s the problem, you know, it’s about greater transparency of the tax system, stronger regulation and clearer signs from the government as to what the correct amount it.”

So the accusations are based on the fact that Starbucks pays the legally required and approved amount of tax as agreed between itself, its accountants and HMRC, the UK Government’s tax collector; but UK Uncut believes they should pay more. The Guardian, which has paid less tax than Starbucks on comparable revenues, also pays the legally required and approved amount of tax. So why the different approaches to these two ‘tax-avoiding’ companies, as UK Uncut would claim?

The Politics Of Envy

So why target Starbucks, a successful American-owned multinational brand? Is it possibly related to the brand’s inclusion in Naomi Klein’s book on anti-globalisation, No Logo, which criticises Starbucks for aggressive invasion (sic) of a region?

Google, Amazon, Apple and Microsoft, have also come in for criticism for the way they conduct their UK tax affairs, although strangely little has been said about these yet by UK Uncut; maybe they would struggle to survive without these, or is that criticism unfair? (Or should that be UK Unfair?)

Other targets have included the banks that were bailed out by the previous Labour government to the tune of £65bn, Lloyds Banking Group and Royal Bank of Scotland, and, strangely, banks that were not: Barclays and HSBC. The issue UK Uncut appears to have with these banks is that they pay their staff bonuses.

So it’s not just ‘tax avoidance’ – it’s wealth creation in general that upsets these activists. Whether its creators meant it to or not, UK Uncut has become a vehicle for the usual band of ‘anti-globalisation’ (i.e. anti-capitalists), such as Socialist Worker – as can be seen clearly here in this video; watch out for the prominent ‘Tax the rich’ signs at 00:10.

Conclusion

This group no longer has credibility, if it ever did, and its actions at Starbucks are reprehensible. The intimidation of customers and staff (often immigrant baristas) can be seen in this video; chants including “Starbucks: Pay your tax or we will shut you down” demonstrate their attempts at bullying the staff and customers into taking their business and labour elsewhere. It is often wrong on the facts of what has been paid and conversely it demonstrates no concept of what it thinks should be paid. It targets popular businesses but ignores others with similar tax profiles, such as the Guardian (with its similarly dubious approach to reporting corporation tax cases), demonstrating its inherent political bias.

So in summary: a movement that uses implied force, targets a foreign-owned business, but not a comparable organisation that aligns with its politics. Isn’t this how the brownshirts began their brand of revolution?

UK Uncut insists that Starbucks should pay some indeterminate higher amount of tax, not decided by tax legislation enacted by parliament, or enforced with the rule of law, but instead decided and coerced by the baying mob. Witness the politics of envy in action.

Advertisements

One thought on “UK Uncut, Corporation Tax And The Politics Of Envy

  1. This article reveals the fallacy behind these ridiculous organisations hell bent on enforcing the ‘public good’ (obviously these organisations alone are going to decide what is good/bad and enforce it upon us all).

    The self-righteous and contradictory behaviour of these groups is incredible. One minute the world is coming to an end, then we have too much and must tax and redistribute out the wealth, then we must stop again because the worlds ‘re-ending’. I mean seriously – is this some sort of state funded dream land or heaven where everything is automatically provided?!

    If you don’t agree with Starbucks then the answer is amazingly simple: Don’t purchase anything at Starbucks. The market gives you the right to boycott. If you really want to further fund the government: Work your ass off, save the money (whatevers left after initial income tax, NI etc….) the go to the Treasury and offer them all your remaining money. I’m certain they will accept your transaction (and possibly ask if you have any more).

    You don’t have a right to tax others. END. Leave people alone. Stop being pests and invading others right to choice.

    These people produce nothing and therefore have to rely on others for their existence: which they now believe they have the moral right to do. They snear at banks for being ‘bail-out’ recipients when in fact their entire life is one prolonged state induced ‘bail-out’ from birth to death Iin no way justifying bank bail-outs).

    These groups are basically stuffed with losers who couldn’t produce/achieve anything on their own, so they have decided to become socialist bandits (with some spurious moral code about their ‘rights’ to banditry).

    Simply: Yet another creed of ‘intellectual beggar’ is upon us.

    Get a job. Get a life. Go away. And I’m going to Starbucks from now on.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s