Anorak | Starbuck balls: they’re becoming insane over this corporate tax dodging

Starbuck balls: they’re becoming insane over this corporate tax dodging

by | 3rd, July 2013

TWO stories that show quite how insane people are becoming over this corporate tax dodging stuff. Both, of course, from the Mail . The paper that can indeed read the zeitgeit but never quite get the details correct.

The first, about Starbucks :

Starbucks’ UK sales during the year rose 4 per cent to £413.4million the biggest increase since 2008.

But the company made a loss of £30.4million after paying £26.5million to overseas subsidiaries in ‘royalty payments’.

It also paid £1.8million to other Starbucks companies as interest payments on loans made between divisions.

Think about the paying the royalty bit for a moment. If you open a coffee shop without the Starbucks brand are you going to get as much trade as if you open one with it? Quite: so the brand has a value and it’s right that that value be paid for. A Liverpool FC replica shirt is worth more than a Bath United one: the brand adds value to it.
But let’s ignore that for a moment and add back in those royalty payments. And also the interest on thise inter-company loans. So we add £28.3 million to their results, adding that to the £30.4 million loss. We’ve still got a £2.1 million loss. No, you do not pay corporation tax on profits that you have not made. There is simply

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Posted: 3rd, July 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink

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