18 November 2012
I love Britain. Yes, there is a great deal that we need to do to get our nation fitter and healthier but, essentially, Britain is Great.
But how is it that a smallish business like UKFast paid 300% more tax than Facebook last year? I can assure you that we don’t turnover similar amounts and their profits dwarf ours. And how is it that, if you add up all the tax that Starbucks has paid since inception 14 years ago, we have paid more at UKFast.
The reason? We love Britain. Yes, it would be nice to pay less but every penny we make goes into making the UK a stronger economy. As for everyone who doesn’t proportionally chip in, you are eroding our great nation. This isn’t a tax loophole where corporations think it is fair game to exploit. They are exploiting the people of Britain, it’s as simple as that.
Maybe we should question why we use these brands.
The government has lost its way in many areas but its single biggest failing has to be on its own Tax Planning Strategy.
Have you ever had one of those calls from the UK tax collector? If they were a business, they would not retain a single customer. If you received the same type of service from your favourite local restaurant when it was time to pay the bill, you would never, ever, ever go back.
And meanwhile, whilst the British government have been squeezing the juice out of SMEs, the larger corporations have avoided much of the pain that we have been experiencing.
This type of policy, coupled with the UK rates, scare off so many businesses from the UK, encouraging the transfer of funds and profits to carefully crafted offices in strategic tax-free locations like Switzerland, Monaco, BVI, Bermuda, Isle of Man, Jersey and Lichtenstein.
Imagine if all the businesses that once traded and declared all their profits through the UK, came back. If you had to drop the tax rate to encourage this to happen, you would make a smaller rate of tax but you would be casting that smaller percentage over a much wider net and, consequently, make significantly more revenue. When are we going to get someone commercial in the government who can help them see this?
eg. 50% of 100 =£50 but 15% of 1000 = £150
This is a volume game and, whilst the government extracts every last drop from each and every SME, if they took any more, they’d be taking the pith!
All of these tax free schemes cost money to run. We get offered them at UKFast regularly; people quote around 12 to 15% to administer, but you save millions. If the government slashed its corporation tax to 10% or 15%, people would have no reason to go elsewhere.
I personally disagree with tax avoidance schemes. I take the approach that you have to deal with the rules of the game. Any other approach, in my opinion, is merely cheating. If the rules change then, fine, readjust but in the meantime just knuckle down and focus on running the business.
Britain is the ultimate economy from which to run a business. It has got a huge population, an established financial centre and its own currency. It’s just got some seriously large tax disadvantages.
So, with Amazon paying around 0.25% in tax and Google 1.51% (£6m from £395m ), what’s the answer?
Why wait for the government? We have no guarantee that they will ever react in time or in our favour. The answer is in our hands. After all, it’s our destiny.
If every Brit chose a local coffee shop and boycotted Starbucks, how long would it stay in business?
The power is in the hands of the consumer, more so than ever. For the first time, the consumer is really right.
Remember Ratners? Biggest jewellery chain in the UK; went bust overnight when Gerry Ratner, the founder, slated his own jewellery. What’s the difference here? Starbucks, Amazon, Google, Ebay and all the others are basically saying that they have absolutely no regard whatsoever for the British consumer or economy. Hang on guys, that’s us!
My Kindle went into the bin last week and I’ll start using a British bookshop. The economy needs contribution to survive. Anyone taking out more than they use is starving the system and damaging it for us all.
With social media and the voice it gives to each and every one of us, this is real power, much bigger than anything the government can do.
Amazon’s Andrew Cecil might sit there smugly avoiding questions to politicians as readily as he does tax, but we can collectively wipe that smile off his face very quickly. Whilst Cecil might not be intimidated by the UK government, he knows he has to listen to the consumer.
I’ll not use Amazon or Starbucks again; they have seriously gone down in my opinion and, whilst Google has a place in everyday business, I will stop clicking on sponsored ads. And, as a business, we are investigating other areas anyway because Google is less potent these days, with more mediums popping up and providing other lead generation opportunities. Whilst Google diversified, they have become less good at what they originally became infamous for. (Sorry Dan – consumer talking)
As an owner of a business that is valued at over £100 million, I could save £30 – £40 million if I moved abroad, but I can promise the British public that I love it here. If I ever sold UKFast, nothing would prise me from my home in Wales and, whilst I am ironically registering in the BVI (British Virgin Islands) as a “Non Belonger” because we are building a second home over there, I will always be Welsh, proud to be British and happy to contribute in every way that I can with the tax the company generates from the great British businesses who kindly place their business with us.
Time to stand shoulder to shoulder, buy British wherever possible and drive this economy and Britain forward.