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Tax bills set by opinion poll

John Rentoul

The decision by Starbucks to pay “about” £20m more in tax than it needs to over the next two years* shows the power of public opinion and consumer boycott.

CityAM 211112 BuzzChart 300x196 Tax bills set by opinion pollAnyone wanting to know why the company should volunteer to give up the money need only look at this “buzzchart” produced by YouGov, which shows whether people have whether people have “heard good or bad news” about a company.

The reputational effect has also hit sales, according to a separate YouGov opinion poll opinion poll last month, which found that 27 per cent of respondents said that “there are companies I actively boycott because they don’t pay enough tax”.

When asked about three named companies: 16 per cent said they “used to buy drinks or food from Starbucks but have recently stopped doing so because of the issue of tax”; 10 per cent said they had stopped shopping at Amazon and 7 per cent even said they had stopped using Google.

netscape navigator 300x225 Tax bills set by opinion pollThis last brought back fond memories of switching to Netscape in protest at Microsoft’s monopolistic promotion of Internet Explorer.

I thought these were surprisingly high numbers. But even if they exaggerate by, say, a factor of four, that is a setback worse than paying a bit more tax over the next two years.

The Independent on Sunday leading article on the subject is here. The YouGov poll questions are summarised below:

In recent months several well known companies have been criticised for not paying enough tax in the UK. Do you currently boycott the products or services of any companies in response to them not paying their fair share of tax?

Yes, there are companies I actively boycott because they don’t pay enough tax 27%

No, while I care whether companies pay tax I don’t really know enough about the subject or which companies don’t pay tax 42%

No, the price and quality and other considerations are more important to me than whether a company pays tax 21%

Not sure 10%

Thinking specifically about some of the companies that have been accused of not paying enough taxation in the UK, which of the following best applies to you?

I used to use Google’s website but have recently stopped doing so because of the issue of tax 7%

I used to shop at Amazon but have recently stopped doing so because of the issue of tax 10%

I used to buy drinks or food from Starbucks but have recently stopped doing so because of the issue of tax 16%

* “Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges,” said Kris Engskov, managing director of Starbucks UK. “In addition, we are making a commitment that we will propose to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years.”

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  • David Cage

    But let us not lose sight of the fact it is well under half what small and medium businesses with no cross border loopholes pay. A five per cent of sales tax with zero loopholes or let out clauses would raise far more from multinationals and reduce the burden on UK companies as well as increase their competitiveness.

  • http://twitter.com/JohnRentoul John Rentoul

    I think the amount is an estimate, but the co has promised not to claim reliefs for intercompany transfers (see quote in footnote), so that would increase its actual corporation tax bill.

  • http://twitter.com/JohnRentoul John Rentoul

    And I ended up with Chrome and the whole Google caboodle because it is brilliant software and now people say it doesn’t pay enough tax!


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