by the same logic, Starbucks selling coffee beans to themselves at extortionate prices from a low tax jurisdiction (Switzerland iirc) isn’t tax avoidance. it might be legal, but it’s very obviously a rouse for avoiding tax. the right-wing seem to think that because HMRC are hopelessly inept at identifying and tackling tax avoidance, it doesn’t exist. they wish! because then all they would have to do is get the right people on side at HMRC and everything they do will be justifiable… oh wait a minute….
Isn’t it amazing how some people can get completely the wrong end of the stick?
As a detail, the margins on those coffee beans were 20%. And coffee is a very small part of the cost of a coffee chain (less than 5p a cup of coffee). So there ain’t much “tax avoidance” going on there. But more importantly, not to pay a margin over cost price on those beans would be illegal.
How are company subsidiaries supposed to deal with each other over tax jurisdiction boundaries? That’s right, they’re supposed to do deals at prices that reflect the prices that unrelated entities would do the same deals at. How many international coffee brokers do deals at zero margin? No, not zero profit, but zero margin over cost price?
None, right? So for Starbucks Switzerland to do zero margin over cost price deals for coffee beans with Starbucks UK would be a flagrant breach of those transfer pricing rules, wouldn’t it?
As I say, amazing how people manage to get the wrong end of the stick. They’re complaining, shouting about, something that they themselves would complain about if it didn’t happen. Insisting that some is tax avoiding when they’d be shouting about tax avoidance if they didn’t do it.
Mad as a box of frogs.