There have been a lot of people finding my blog by searching for “how much tax does Starbucks really owe” or variants thereof such as “who owes more Starbucks or Stemcor”.
I feel that they may have left my blog in disappointment, because I don’t actually give a figure. Well, I will now.
Firstly, I must explain my methodology so you don’t think I’ve just plucked the number out of the air.
I calculate tax avoidance (which is legal and immoral and illegal) based on an expectation gap basis. That usually means that I look at a company’s profits and multiply that by the prevailing ethical rate of corporation tax.
However, as we know, Starbucks have made losses in the UK so as to avoid tax. Therefore I resort to the ultimate test of what tax would be collected under a suitable GRAPIST, such as mine or one which is copied word-for-word from mine.
This piece of legislation calculates exactly the tax that would be due that you would expect. So, in effect, it arrives at the same answer but from exactly the opposite starting point.
Applying my GRAPIST, I calculate that Starbucks should have paid tax of approximately £1.3bn to date, and will owe £250,326,347 for 2011.
These figures have been verified by fully subscribed members of the JTN.
Stemcor, on the other hand, have paid exactly the right amount of tax using this basis. This has been independently verified by Margaret Hodge who appears to have used my methods too.