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How to pay tax like Starbucks

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Starbucks, Google, and Amazon have been booed and hissed like pantomime villains during 2013. Their evil deed, according to Fairy Godmother Margaret Hodge, is not paying the right amount of tax . 

Company directors across the land may have wondered how these wicked companies avoided a cream pie in the face from the tax man. But wonder no longer! Help is at hand. Anyone looking for a fairy tale ending to large tax bills should read on

Invest in a tax haven

Putting your money in certain tax havens, such as a pension fund, allows you tax relief on the sums you put in and ensures that there are no taxes on any income and gains you make.

Move your business away to escape the taxman

Locate in certain areas of the country, such as Hartlepool or the Isle of Dogs, and save on rates and direct taxes.

Slash your tax rate to ten per cent

You can pay just ten per cent tax on profits if you invent something clever and patent it.

Send your profits abroad

Start a business and buy your supplies from overseas. The supplier will pay tax offshore on the profits it earns from you and youll get a tax deduction.

Lose money

If your business makes a loss you can escape tax altogether and perhaps even get a tax rebate. This should keep you going when you run out of funds and teeter on the edge of bankruptcy.

Give shares away

If you run a business you can get tax relief for giving shares to your employees. Many businessmen find that this also encourages the employees to work harder for the business increasing the chance of the business growing and taking on even more employees.

Give shares away – part two

Even better, if you give the shares to charity, not only will you avoid Capital Gains Tax, you can also obtain income tax relief.


If you go abroad and stay there, your overseas income will escape UK tax. So you can put yourself in the same position as the billions of other people who have no connection at all with the UK.

Invest in new business

You can get tax relief on your investment and escape tax on any gains if you invest in certain types of business and provide much needed funds for a sector of the economy.

Invest in new business – part two

And finally, for most types of business your children won’t have to pay Inheritance Tax on these assets on your death.

The point is, of course, that all of these techniques are not only legal but for the most part rely on tax reliefs introduced by the Government in order to encourage precisely the sort of behaviour outlined.

It is clearly good for the country if more money is invested in pensions (to relieve the burden on the state), enterprise zones (to assist the economies of deprived areas), small businesses (regarded as the growth engine of the economy) and innovation.

Taxpayers following these tips are therefore doing exactly what the Government wants them to do.

Perhaps someone should tell the right honourable Fairy Godmother

Andy White is a tax partner at accountancy firm CBW.



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