Tax Backlash Prospect For Independent Shops

Poppy Trowbridge, Business & Economics Correspondent
Tax Backlash Prospect For Independent Shops

Independent businesses could benefit from public uproar over low rates of corporation tax paid by global giants Starbucks, Amazon and Google, according to retail experts.

The backlash has been prompted by the revelation that Starbucks has paid just £8.6m UK corporation tax in the past 13 years, on sales of £3.1bn, when most businesses will pay a corporation tax rate of 24% this year.

In 2011, Google paid £6m tax against sales of £395m, while Amazon paid no tax at all in the UK - despite sales here reaching £3.3bn.

Matthew Stych, research director at analysts Planet Retail , believes British retailers can make the most of the furore by highlighting their own contributions and good practices.

"It's a golden opportunity that comes along once in a decade or so, to really capitalise on the negative publicity that some global retailers are receiving at the moment," he said.

"I think it's a huge opportunity that independent retailers in the community must seize now."

Independent booksellers in Hertfordshire are doing just that. With support from the Booksellers Association they have launched an advertisement campaign to publicise the fact they pay their taxes.

"People need to think about where they are spending their money and we are hoping that this campaign will bring that to their attention," said Sheryl Shurville, co-owner of Chorleywood Bookshop.

But other analysts are not convinced such consumer campaigns will have any long-term benefit.

"We're unlikely to see any massive dip in the sales of these companies under scrutiny," Douglas McNeill, chief analyst at Charles Stanley , said.

"Whilst ethical issues can temporarily make people pause for thought, consumers make their choices on the basis of eternal basics of price, quality and convenience."

Mr Stych said large brands may yet find a way to turn around the negative publicity.

"As far as Amazon and Starbucks are concerned, I think there's an opportunity to strike a more conciliatory note," he said.

"This is for them also an ideal opportunity to regain or re-forge that bond with local consumers".