Sunday, January 27, 2013

Starbucks threatens Cameron after 'unfair' tax attacks

From the Telegraph -

Starbucks has threatened to suspend millions of pounds of investment in Britain after what it described as constant and unfair attacks over its tax affairs by David Cameron and the Government.

Photo: Getty
Kris Engskov, the multinational’s UK managing director, demanded talks at Downing Street after the Prime Minister said tax-avoiding companies had to “wake up and smell the coffee”.
Mr Cameron’s use of the phrase at the World Economic Forum in Switzerland last week was taken as a direct attack on Starbucks which has been criticised for not paying corporation tax in Britain.
Mr Engskov was so concerned about the “politicisation” of the tax issue that he asked for the talks at No 10, where he met officials last Friday. Starbucks argues that it makes no profits in the UK and so is not required to pay the tax. “The PM is singling the business out for cheap shots, a company that, it should not be forgotten, has pledged to pay tax now and into the future,” said a source close to the firm.
The warning on investment comes amid concern among businesses that Government rhetoric on tax avoidance is hurting their image while their creation of jobs and wealth is not highlighted. Today, Boris Johnson, the Mayor of London, tells The Sunday Telegraph: “We should stop bashing wealth creation — such talk is absolute nonsense.”
The US coffee chain has found itself under regular attack after it was disclosed that since its arrival in Britain in 1998, it has paid £8.5 million in corporation tax, despite total sales of £3 billion. It said last month it had made a profit in only one year.

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