# 127 The power of the people
This month Starbucks announced it was going to pay off £20m of unpaid corporation tax after it said it was ‘shocked by the “emotional” reaction of its customers to the tax row’. Well there’s a surprise! Hopefully they will start a trend and other big companies will feel compelled to relook at their current systems. But I suspect it will be the power of their customers that makes the decision for them.
Currently corporation tax is only paid by foreign companies on profits made in the UK but UK based companies have to pay corporation tax on their taxable profits wherever they are earned. Huge loopholes if ever I saw them. This leaves UK businesses vulnerable wherever they are and foreign brands trading here, far too comfortably off. Why should they not contribute to our system?
Starbucks alone made £400m from British consumers last year and didn’t have to put a penny into the tax pot. Great for them, not for us. £20m may be a small drop in the ocean to them, but it’s more than I’ve seen any other company do so far. I guess we all have to start somewhere.
Other giants like Google and Amazon are also being watched but there are plenty more out there who need a little nudge in the right direction. They’ve even got their own festive Christmas carol tribute currently doing the rounds on Facebook:
I had no idea some of these companies were taking advantage of our tax loop holes. Big brands such as Boots, who I thought were British through and through, also take advantage by ditching the UK completely as their base. I don’t blame them for taking advantage, but this is a blatant and really should not be allowed. And if the Government won’t do anything about it someone else will have to.
Does it make me want to shop elsewhere? Well to be honest such is life at the moment that brand shopping is almost a no go area.. I’m a brand product company’s worst nightmare. The only shops I have used out of all of these are Boots and Ebay and as the latter’s charges continue to soar I’ve migrated to Etsy.
The recession is very much driving news headlines at the moment. Big companies seem to be getting away with blatant tax dodging when smaller businesses, entrepreneurs and the average consumer are struggling to survive. The Government pot needs topping up because vulnerable people are losing out. As far as I can see if they won’t deal with it, it’s down to the consumer to take matters into their own hands.
As in Starbuck’s case consumers have shown they have the power to make a company rethink how it does business. If you are angry about corporation tax and shop at any of these companies, just stop going there. If everyone thought like this they’d be hard pushed to stay in business at such a vulnerable time. This is when consumer power really works.
Don’t knock it. You can make a difference.
Vote with your purse.