Give the protest - and Starbucks - some credit. This £20m tax ‘donation’ is a step in the right direction
Why condemn a "voluntary" donation if there's no other option?
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Your support makes all the difference.One thing Starbucks isn’t short on is sweetener; dump all the supplies from 600 UK stores into the Thames and there would – for a minute – be a current of dirty soda churning straight through London. Unfortunately for the coffee giant, however, it takes more than Sweet n’ Low to brighten public opinion. So it was that yesterday afternoon, after widespread protests at Starbucks’ tax avoidance, UK managing director Kris Engskov attempted to remove the bitterness a different way.
In an open letter shared on Facebook, Engskov – formerly an aide to Bill Clinton - trumpeted that Starbucks will pay an additional £20 million in tax to HMRC over the next two years. That's “above the rate required by law” - a gesture prompted by "our customers", who have made their feelings on avoidance “loud and clear” (often on Starbucks own Facebook page: “I go to costa now... Coffee is better, AND THEY AT LEAST PAY TAX !!!”).
This morning, however, a lot of the Caps-Locked customer bitterness remains. While £20 million is not a sum to be sniffed at, and Starbucks' other commitments admirable (they will no longer offset overseas licensing charges or intra-company loans against tax) the general scepticism - encouraged by tax experts who labelled this voluntary donation a “joke” - has yet to soften. Top of the Twitter reaction is snark from Gary Lineker: "Starbucks to pay some tax in future. How terribly considerate of them", meanwhile campaigning group UK Uncut announced that tomorrow's protest in Starbucks stores will go ahead as planned, this reform being just a "desperate attempt to deflect public pressure".
Of course, the tax experts have every right to head scratch. First, this sudden flash of generosity hasn't been agreed with HMRC. Second, it whiffs of PR. Third, it makes a mockery of the point that tax should be a legal obligation - not a voluntary one.
But it's hardly Starbucks' fault that the UK tax system hasn't kept up to speed with the increasingly global nature of trade - so why should customers sneer at the company for making a "voluntary" donation? It's not their job to lobby for tax reform. Furthermore it shouldn't matter that this decision was made to "deflect public pressure" as the ends - a more responsible multinational - surely justify the means.
So perhaps, customers have more reason to sweeten up. Starbucks know how closely they will be watched in future, and the fierce chairman of the Public Accounts Committee Margaret Hodge MP called this only "a first step in the right direction". But a bitter note to close on: Google and Amazon have, for the moment, declined to follow suit. And it's far harder to protest these monopolies than Starbucks, who have real competitors just feet away.
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