View more on these topics

Tony Wickenden: What do Starbucks and Prince Charles have in common?

Tony-Wickenden-MM-Peach-700x450.jpg

What have Starbucks and Prince Charles got in common? No, not frapuccinos or grandchildren – though, no doubt, some grandparents and grandchildren do visit Starbucks. Probably not that many Princes though. “Chris get many Princes in your Farringdon Bux? No? Thought not.”

There are two things in common that I know of.

The first is that the tax that they pay (or, more accurately the lack of it) has been a subject of interest and debate for “Witchfinder General” Margaret Hodge of the Public Accounts committee.

The second is that both pay tax voluntarily. Starbucks, following the “inquest” into their low (but apparently not illegal) effective rate of corporation tax. Prince Charles on account of the arcane tax position of the “private estate” that is the Duchy of Cornwall. Basically, the Duchy has no legal liability to pay tax (income tax , capital gains tax or corporation tax) as it is equated to the (tax exempt) Prince himself.

The Prince, however, voluntarily pays tax on income from the Duchy that is paid to him net of any deductions for allowable expenses eg private staff costs. So on the one hand , “well done Starbucks and Prince Charles”. On the other, shouldn’t the law be amended to ensure that the amount of tax thought to be reasonable , is actually paid ?

In the case of Starbucks , of course, a high degree of international co-operation would be necessary to achieve this objective and when national self interest is at play the outcome is likely to be anything but certain and quickly achieved. Subject to this very real practical challenge though , relying on voluntary payments seems all a bit too “discretionary” in this day and age doesn’t it?

Anyway, make mine a Grande(daddy) Taxachino.

OK, that’s pretty weak I agree. Add two extra shots.

Tony Wickenden is joint managing director at Technical Connection

Access full CPD, technical updates and business generation ideas through Techlink Professional. Go to www.techlink.co.uk  and click the Contact Us link at the top of the screen and then request your free trial from the drop down menu.

Recommended

Advisers back Garnier over RDR review

Advisers say they would warmly welcome any Treasury select committee review on the impact of the RDR but stress that any inquiry needs to allow time for the initiative to bed in. Conservative MP for Wyre Forest and TSC member Mark Garnier has asked for the committee to consider an inquiry. Speaking to Money Marketing, […]

Steve Webb: 13m people will see a fall in living standards in retirement

Pensions minister Steve Webb says 13 million people will see a drop in living standards when they retire, far higher than previous official estimates. New research from the Department for Work and Pensions published to today will show that although the need for income often reduces sharply in retirement, as people no longer have to […]

What does the OFT have in store for the pensions industry?

It is coming up to the first anniversary of automatic enrolment and the workplace pensions market is really beginning to warm up.  With staging dates rapidly approaching increasing numbers of employers are engaging with the auto-enrolment requirements.    The Office of Fair Trading will soon publish their report on the effectiveness of competition in the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. A non-discretionary taxpayer 13th September 2013 at 11:21 am

    Ironically, it is Starbucks rather than Charles Windsor that is in the more defensible position. Although I agree that a co-ordinated review of transfer pricing is required in order to prevent such financial acrobatics. All things being equal, a business’ tax liabilities should equate to the profits made in that jurisdiction, and the artificial manipulations of copyrights etc should be prohibited.

    As for Charles Windsor, here is a man who pays his servants less than Starbucks and only pays enough tax to avoid public indignation. Margaret Hodge is actually doing a good job in shining a spotlight on his attempts to pretend that his business affairs are personal, although I suspect that the powers that be will ensure that the abuse of privilege continues.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com