Saturday, 19 April 2014

We're all in this together! (4)

The Conservatives' slogan The "Big Society" and "We're all in this together." Formed part of his first speech after the election. It was Wednesday 06 October 2010 when Mr Cameron said "This is not a cry for help, but a call to arms. Come on, let's pull together, Let's come together, Let's work together in the national interest. It's about government helping to build a nation of doers and go-getters. It is right that those with broader shoulders bore a larger share of the burden of reducing the deficit, and the Government would always aim to ensure measures to cut spending were fair."

So I thought I would observe things around me.  Just to see if we are 'all in this together.' To see if the load has been shouldered by everyone. To see if we have all actually played a part in sharing the burden. Helping to recover the country and improving everyone's living standards. After all as millionaire David Cameron says, we're all in this together, well we are - aren't we?

I like a cup of coffee, I even like the 'specialist' coffee. I don't quite get the corner coffee shop that is Starbucks. I have been a couple of times but I wince at the price. Yet,  Starbucks has only reported taxable profit once in 15 years in the UK. Starbucks reportedly paid just £8.6m in corporation tax in the UK over a period of 14 years and nothing at all in the last four years - despite sales of £400m last year. 

As part of its tax affairs, the firm transferred some money to a Dutch sister company in royalty payments, then bought coffee beans from Switzerland and paid high interest rates to borrow from other parts of the business. I have never been able to get my head around borrowing money from yourself - then charging yourself a very high interest rate, just so you can offset the interest payments against you're tax bill. And its a perfectly acceptable thing to do!

Proving once and for all, we're all in this together!

The Public Accounts Committee said  "We found it difficult to believe that Starbucks was trading with apparent losses for nearly every year of its operation in the UK." After a public outcry and an investigation by MPs, suddenly Starbucks sees the light and has now announced that it would after all be paying more corporation tax.  Starbuck's said "We listened to our customers in and so decided to forgo certain deductions which would make us liable to pay £10m in corporation tax this year and a further £10m in 2014."

While the government is acting like a rabbit in the headlights. Among those hoping the tax fiasco is fixed are non-international companies based in the UK. Which have become increasingly vocal in their attacks on the unfair tax advantages afforded to multinationals.  However, it is the politicians themselves who are responsible for this state of affairs by creating a tax system which is hugely complicated and open to being exploited. The only solution to this is to create a simpler, fairer and more competitive tax system.

But it's your pound and it's in your pocket. The government are seemingly frightened of the wealthy multinationals, will do nothing. So can you find another supplier other than the tax avoiders to make your purchases.

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