Re: Three cheers for the Chancellor : Wed Nov 07, 2012 4:53 pm  

Ferocious Aardvark wrote:

Possibly. Starbucks UK could certainly be Baron Hardup, as it makes no money. And you seem to be contributing the buffoon.

Never takes you too long to get to personal insults...and you said this wasn't a question of emotion, but again you are being clearer emotive rather than reasonable.

Ferocious Aardvark wrote:

Wow, some of these questions are tough. But, I'm guessing not. Am I right?

Glad we agree. So why can't that count as a cost to the business?

Ferocious Aardvark wrote:

If Starbucks UK spends publicity money in the UK advertising to the UK consumer this should be tax deductible.

And if Starbucks parent spends publicity money that impacts the UK consumer?

Ferocious Aardvark wrote:

If Starbucks UK needs to protect its brand by trademarking in the UK then ditto though I'm guessing the parent company took out the worldwide protections donkeys ago.

And if Starbucks parent takes such actions on a worldwide basis that affects the UK?

Ferocious Aardvark wrote:

A complete non sequitur. You persistently fail to address the simple point that Starbucks is purportedly paying Starbucks for Starbucks' brand. Why this myopia? Starbucked if I know.

If it was a point, I would address it. Do you feel there is an issue with Starbucks UK paying Starbucks parent for the value of the brand, but not for the value of the beans?

Ferocious Aardvark wrote:

What, you need me to explain why it is not valid for me to pay less or no tax, by the ruse of paying royalties to myself? Rather, you explain to me how it is valid. That's the explanation we're missing.

Your own tax situation is entirely irrelevant to the validity of a subsiduary paying out to it's parent company.

Re: Three cheers for the Chancellor : Wed Nov 07, 2012 5:11 pm  

Mintball wrote:

I was thinking of a couple of others posters here, relating their experiences of working in an industry over a number of years, and seeing how the attitude toward customers has changed.

It doesn't have to be "dishonesty", as such, but relates to the entire culture of the customer now being expected to have researched and be an expert in everything they buy, because they cannot rely on a salesperson to necessarily offer the best for them.

It's a very old issue - the legal term caveat emptor refers. Having said that consumer law was largely supposed to deal with the issue.

Re: Three cheers for the Chancellor : Wed Nov 07, 2012 9:18 pm  

Richie wrote:

Never takes you too long to get to personal insults...and you said this wasn't a question of emotion, but again you are being clearer emotive rather than reasonable.

That's pretty random, to pretend you view my satirical metaphor extending your panto imagery as "personal insults". However I note that your skin is about 1% of standard thickness so will avoid anything than could even remotely upset your timorous sensibilities in future, and apologise for an attempt at humour that was beyond your capacity to understand.

Richie wrote:

And if Starbucks parent spends publicity money that impacts the UK consumer?

"Impacts the UK consumer" in what way, exactly? Are you suggesting that Starbucks USA pays for marketing campaigns in the UK? When did it do that, then?

And if Starbucks parent takes such actions on a worldwide basis that affects the UK?

Absolutely not. Only actions taken in UK law affect the UK.

Richie wrote:

Do you feel there is an issue with Starbucks UK paying Starbucks parent for the value of the brand, but not for the value of the beans?

Without wishing to be any more blunt than is absolutely necessary, I will only say that if you genuinely do not get the distinction I have laboured, then I think there is nothing else a human can say to help you understand it, simple though it be.

Richie wrote:

Your own tax situation is entirely irrelevant to the validity of a subsiduary paying out to it's parent company.

Without wishing to be spelling police, can I just point out it's "subsidiary" as your version grates.

That said, and as yoiu wel know, my analogy had nothing at all to do with my tax situation. It was a simple question: "why is it not valid for me to pay less or no tax, by the ruse of paying royalties to myself?" I asked you to explain that analogy to me, and note you either can't, or won't.

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 9:02 am  

A couple of things - if you open a Starbucks and you open Mintball coffee shop next door to each other which do you think will be busiest? and which shop will be charging the most for the same coffee? The brand has value - Starbucks will spend hundreds of millions protecting and developing the brand - that has to be paid for somehow. If it were a stand alone business even FA would accept these marketing costs as legitimate business expenses - but if they are wrapped up in royalties they are not?

Secondly - the royalties will also help to cover the cost of the deals that are conducted by HQ e.g. supply chain, the purchase, manufacturing, packaging and transporting of the coffee will be one central deal - if Starbucks UK had to do this they would incur cost which would be tax deductable. Banking facilities this again will be a a central deal, would Starbucks UK get as good a deal if they were a standalone? Interest is also tax deductable.

Finally there is the position of operating position and actual position. You will struggle to find a large company where there isn't an underlying operating position is the same as the stated results. All large companies have exceptional items that are tax deductable - take BP and the disaster in the Gulf of Mexico - they make have set aside 20bn to cover the cost but in effect that is 14bn because of the tax saving - should the tax payer be funding an error of this nature - makes Starbucks tax avoidance look chicken feed.

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 9:29 am  

Sal Paradise wrote:

Starbucks will spend hundreds of millions protecting and developing the brand - that has to be paid for somehow.

It does, that is what the profits do.

Sal Paradise wrote:

Secondly - the royalties will also help to cover the cost of the deals that are conducted by HQ e.g. supply chain, the purchase, manufacturing, packaging and transporting of the coffee will be one central deal - if Starbucks UK had to do this they would incur cost which would be tax deductable. Banking facilities this again will be a a central deal, would Starbucks UK get as good a deal if they were a standalone?

So you want Starbucks to charge Starbucks for doing deals that reduce the costs of Starbucks.
The UK arm will be being charged the appropriate costs of the tangible goods it uses.

This isn't about the tangible goods but a made up fee for "brand value"

Sal Paradise wrote:

Finally there is the position of operating position and actual position. You will struggle to find a large company where there isn't an underlying operating position is the same as the stated results. All large companies have exceptional items that are tax deductable - take BP and the disaster in the Gulf of Mexico - they make have set aside 20bn to cover the cost but in effect that is 14bn because of the tax saving - should the tax payer be funding an error of this nature - makes Starbucks tax avoidance look chicken feed.

This isn't about exceptional one off costs it is about fleecing HMRC year on year.

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 9:29 am  

Sal Paradise wrote:

<straw man (or men) alert>

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 7:33 pm  

Ferocious Aardvark wrote:

That's pretty random, to pretend you view my satirical metaphor extending your panto imagery as "personal insults". However I note that your skin is about 1% of standard thickness so will avoid anything than could even remotely upset your timorous sensibilities in future, and apologise for an attempt at humour that was beyond your capacity to understand.

It was really an attempt at humour

Ferocious Aardvark wrote:

"Impacts the UK consumer" in what way, exactly? Are you suggesting that Starbucks USA pays for marketing campaigns in the UK? When did it do that, then?

I'm suggesting Starbucks are a worldwide brand for which actions taken in one country impact other countries.

Ferocious Aardvark wrote:

Absolutely not. Only actions taken in UK law affect the UK.

Untrue. And see the above.

Ferocious Aardvark wrote:

Without wishing to be any more blunt than is absolutely necessary, I will only say that if you genuinely do not get the distinction I have laboured, then I think there is nothing else a human can say to help you understand it, simple though it be.

The fact that you haven't explained well enough why you feel the distinction is relevant is hardly my fault now.

Ferocious Aardvark wrote:

Without wishing to be spelling police, can I just point out it's "subsidiary" as your version grates.

That said, and as yoiu wel know, my analogy had nothing at all to do with my tax situation. It was a simple question: "why is it not valid for me to pay less or no tax, by the ruse of paying royalties to myself?" I asked you to explain that analogy to me, and note you either can't, or won't.

If you were a worldwide corporation, you would have a point. You are not, so you don't. No more than a corporation would if it complained about you avoiding tax by putting money into a pension or using an ISA.

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 7:39 pm  

Big Graeme wrote:

So you want Starbucks to charge Starbucks for doing deals that reduce the costs of Starbucks.
The UK arm will be being charged the appropriate costs of the tangible goods it uses.

This isn't about the tangible goods but a made up fee for "brand value"

I feel this is our sticking point: Why some feel intra company costs for tangible items can be seen as a tax deductable cost but don't feel the same about intangibles.
I've given and read plenty to show there is value from those intangibles, but haven't yet seen a good argument as to why they should be differentiated from tangible goods in company costs for tax reasons.

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 9:15 pm  

Richie wrote:

I've given and read plenty to show there is value from those intangibles, but haven't yet seen a good argument as to why they should be differentiated from tangible goods in company costs for tax reasons.

Because they are made up to avoid tax?

Re: Three cheers for the Chancellor : Thu Nov 08, 2012 9:33 pm  

Richie wrote:

I feel this is our sticking point: Why some feel intra company costs for tangible items can be seen as a tax deductable cost but don't feel the same about intangibles.

Given that its perfectly acceptable for any company to avoid making any "profits" and hence avoid paying corporation tax then there is surely a golden opportunity for a person to rent an office on, lets say, Sark (where all the schoolteachers reside), and act as a business centre for every Ltd Company in the UK to have its head office location, leaving the rest of all of the businesses in the UK as subsidiaries of the Sark operation and to be charged a licence or franchise levy to operate on the mainland, such levy being approximately the same amount as this years nett profit ?

Is it worth me seeking out such office space and buying lots of post boxes, they don't have to be real ones do they, can they be virtual post boxes or do I have to cover the island in them ?