I see that Caffé Nero has just managed not to pay any tax on over £200 million turnover last year.
I like Caffé Nero, it’s my coffee shop of choice but I am thinking of moving my business to Costa Coffee. At least I will if they pay their tax, but as they are owned by Whitbread I think they may do. I could be corrected on this of course so please feel free to do so. I will not be taking my business to Starbucks as I think they are another company that appear to manage to ship most of their profits abroad and then pay tax in a lower tax regime country. I think Caffe Nero and Luxembourg go together somehow. I thought Luxembourg would be involved somewhere. Didn’t their boss go on to run the EU or something like that or maybe I am wrong again.
All these companies will tell you they are paying staff wages and VAT and so on, so they do pay tax but they are avoiding their full tax by shipping profit abroad and it is all perfectly legal. All this means of course is that you and me have to make up this tax shortfall by paying our personal tax so we have to pay more than we should. Companies not paying tax in the UK may be legal and very likely is very good accounting practice but is it ethical?
Caffé Nero have a web page about being ethical. It states that
“When we started Caffè Nero, our intention was to cultivate our family feel and grow a business rich with integrity. Now with over 500 stores in the UK alone we continue to take our responsibility to develop a fair and ethical company seriously. We think responsibly for our business and everything we do – how it impacts our local communities, our suppliers, our staff and the environment.”
It also goes on about sourcing coffee beans, being healthy, waste and recycling, modern slavery and chickens. Well it doesn’t mention chickens but it does talk about cage free eggs so I assume they mostly use eggs from chickens. Unfortunately, it doesn’t mention tax. It should and I don’t think it’s very fair on their customers or taxpayers but it is legal so companies can continue to do this. I hope this will be able to stop when we exit Europe after Brexit but I doubt things like this will stop.
I think it is about time companies trading in the UK paid tax in the UK. We are, after all, in debt to various Governments, banks and so on around the world to the tune of more than £1,500,000,000,000 which is a staggeringly huge sum.
Paying tax abroad is the new norm, at least for companies, but if I started to do this HMRC would be after me. HMRC needs to go after the companies who break the ethical (and fair) code of paying tax where the tax is due. It also flags up the danger of selling UK companies to overseas buyers. They will make sure that much of the profit from UK based business is shipped abroad to their own country where they will then pay their tax. This needs to stop and then my personal taxation level can go down.
Fat chance of that happening!