Starbucks, Other Multinationals Face UK Tax Backlash

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Starbucks and other multinationals including Google and Amazon have incurred the wrath of lawmakers and the media in the UK and some other European nations for allegedly not paying their fair share of taxes for profits made in those countries. While Starbucks and other firms say they’ve obeyed the law, their predicament illustrates the issues faced by companies large and small when expanding internationally. As Starbucks seems to be rethinking its tax position in the face of continued bad publicity abroad, it’s a good reminder for all business owners to be mindful of public feedback and how it can impact a brand.

Poor Impressions

Tax troubles jolt coffee seller. The specific issue for Starbucks centers on a report that claims the coffee seller has paid only 8.6 million pounds in taxes in Britain since 1998 and no corporate or income tax over the past three years. Over the same period, the report suggests the coffee retailer sold over 3.1 billion pounds worth of coffee. Starbucks claims it followed UK law. Expanding into international markets means conforming to complex sets of regulations, and failing to comply with the letter or spirit of the law can damage your brand or worse. Reuters

Starbucks bows to public pressure. Running afoul of norms and even customs in international markets can cause big problems for your brand. As Starbucks appears to be discovering in the U.K., businesses ignore these local rules at their own risk and can raise the ire of authorities and even their customers by refusing to comply. Doing business means being a part of a community, and businesses that expand internationally may be part of multiple communities at once. Being perceived as ignoring the norms of that community can have negative results.

Big Dreams

Startups prepare for global conquest. Companies interested in going international should plan for such expansion from day one. Don’t wait for the moment when expansion seems right to start thinking about it. If you are starting a business and believe there is any chance that business will expand internationally, you will want to take a few steps right from the start to pave the way, says startup guru Martin Zwilling. Here are some very important considerations for those who are starting a business they believe could be destined for world fame. Startup Professionals Musings

Things to know before you grow. Whether you planned to expand into international markets from the day you started your company or not, some businesses in their very early stages realize expansion into new markets is important for their growth. You no longer need to be a multinational conglomerate to enter international markets, that’s true. But careful planning is the best way to make sure your expansion is a success. In this guest post, Blaine Pike, UK community manager for OmniJoin Web conferencing explains the important steps to consider. The Savvy Copywriter

How to make your exit. No matter how successful your international business becomes, the time may arrive when you think about selling. Understanding what’s at stake with an international business, whether large or small, can take special knowledge. Here’s an interview with Ian Shearer, Director of Mergers and Acquisitions at Atlanta International, an Ireland-based mergers and acquisitions company focused on technology businesses. Companies like Atlanta International are helpful for international companies when the time comes to move on. Tweak Your Biz

Better Customer Relations

Tips for focus on feedback. A critical method of avoiding problems as your business expands, either around the world or up the street, is to get customer feedback every inch of the way. Here Daniel Kehrer suggests six customer feedback essentials every business owner should consider to make sure they’re taking the pulse of their community accurately. Without customers you would have no business,  so identifying sentiments about your product or service earlier rather than later is critical. Here are some ways to do it right. BizBest

Collect your customers’ thoughts.  Being open to customer feedback is one thing, but waiting for a complaint or scrap of praise to come your way may not be the best approach. Identifying what you’ve done right and wrong can help you make changes to your business and be more responsive to customer needs. So if you want to know how to pick your customers’ brains to learn more about their thoughts and opinions, Mike Abasov has some great suggestions on how to go about it. Have fun! Marketing Before Funding

3 Reactions
  1. Great roundup. I agree, we should all take a lesson from the predicament Starbucks is in and make sure we’re covered. Thanks for sharing.


  2. I’d love to see Starbucks redirect the due tax payments to investing in start ups in poor communities with launches in starbucks shops

    Wrote a letter to Kris Engskov along these lines…

  3. Thanks for featuring me! Appreciate it! 🙂