Unique's English Language for Business trainer Mike Davies looks at the crisis that recently involved Starbucks in the UK.
Starbucks has stated that it needs to "do more" in the UK as far as taxation is concerned, and to that end they have begun talks with the UK Taxation service HMRC in order to determine a way forward.
Starbuck's UK revenue in 2013 was £400m, yet they paid no corporation tax at all due to a complex scheme whereby royalty payments were paid into a Starbucks subsidiary in Switzerland, meaning that the company's UK division declares a loss each year.
The British Economy
As with most of Europe, the UK is experiencing great strain on her public finances, and so the news that a giant corporation like Starbucks was reneging on their social responsibility and avoiding taxes led to a huge outcry in the nation's press. Starbucks feared a backlash from its' customers and so have bowed to the inevitable in attempting to seek agreement over their tax bill.
Subsidiary: Company that is completely or partially owned by another company.
Strain: Strong force that is doing considerable damage.
Renege: To go back on a promise.
Outcry: Considerable disagreement.
Bow to the inevitable:
To accept something (usually after a long time)
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