Starbucks says it will start paying more UK tax - but baristas face cutbacks

 

Starbucks has bowed to the public outcry over its tax affairs and agreed to amend its operation, increasing its rate of corporation tax contributions, but 7,000 of the coffee giant's staff in the UK are now faced with cutbacks to their paid lunch breaks and sick leave.

The company has been using an arrangement which sees it transferring much of its UK profits to the Netherlands to legally reduce its taxable income. As a result, it has paid corporation tax only once in the fifteen years since it opened its first UK store.

But Starbucks has said that, while its UK subsidiary will continue to be charged the 4.7 per cent rate by its Dutch counterpart for use of the Starbucks brands, it is planning to stop using that deduction to reduce its UK tax bill.

The coffee chain paid no tax last year on the £400m it took in sales. If it decides to go ahead with the plan, it will be announced before the Chancellor George Osborne’s Autumn Statement to the House of Commons on Wednesday, the BBC reported.

Meanwhile, baristas at the firm's 750 stores have been told to sign employment terms that include the removal of paid 30-minute lunch breaks and paid sick leave on the first day of illness, The Guardian reported last night. Starbucks said the 30-minute break should not be paid for as it was "meant to be a break from work". A spokeswoman said changes were "unrelated" to the tax affairs

The Chancellor also promised Her Majesty’s Revenue and Customs an extra £77m in funding over two years to “go after” aggressive avoiders and evaders, branding the behaviour “unacceptable”. He said: “It is very important that people who try to avoid their taxes understand that we are going after them.

In a statement, Mr Osborne warned that the “minority” who avoid paying their fair share, sometimes by breaking the law” to expect a crackdown. He said: “The action... will help HMRC close in not only on those who seek to avoid or evade tax, but on the dubious ‘cowboy’ advisers who sell them the schemes and dodges they use to cheat the law-abiding majority.”

Chief Secretary to the Treasury Danny Alexander said: “In restoring the public finances, our first priority must be to tackle those who avoid or evade tax.

“It is simply not fair that at a time when most people are making a contribution to balancing the nation's books, there is a small minority of taxpayers who try to escape their responsibility.”

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing
The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower