Anorak | Starbucks really wasn’t making a profit you know

Starbucks really wasn’t making a profit you know

by | 23rd, September 2013


YOU’LL all recall a little while back there was that furore about how much Starbucks was or wasn’t paying in corporation tax. And one of the defences offered for the company was that as they weren’t making a profit then there wasn’t any tax that they should have been paying.

Then the conversation turned to the things they were doing inside their accounts. For example, they paid a royalty to a Dutch firm for using the Starbucks name. That did indeed dodge UK tax (actually, EU rules make it illegal for the UK to try and tax that amount). But even so, even if we add that money back in, Starbucks UK still wasn’t making a profit.

So we move on to the next bit, which is that Starbucks were paying a 20% fee on the coffee beans they bought from Switzerland. From another Starbucks company of course: there, that’s real tax dodging!

And then today the Mail tells us how much the coffee actually costs :

 Cost of actual coffee in a medium £2.20 cappuccino amounts to 8p

Let’s call that 4% shall we? Just among friends. No, Anorak knows, not all their sales are coffee but we’ve got to make some simplifying assumptions. And

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Posted: 23rd, September 2013 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink