Volunteers at tiny charity shop hounded by HMRC to pay more tax than STARBUCKS

December 13, 2012 | by | 1 Comment

Volunteers at a tiny not-for-profit village store spoke out their outrage today after being “hounded” to pay more corporation tax – than Starbucks.

Almondsbury Community Shop has been pursued by tax collectors for 20 per cent of its annual profits, which are entirely donated to local good causes.

The store, which was set up in 2009, donated £10,000 towards Almondsbury’s scout and guiding units and various groups and sport associations this year.

Customers and volunteers at Almondsbury Community Shop which is being asked to pay more in tax than Starbucks

Customers and volunteers at Almondsbury Community Shop which is being asked to pay more in tax than Starbucks

But volunteers say even more could have been set aside for charities if they had not been forced to “squander” cash on corporation tax.

Starbucks has paid just £8.6 million in corporation tax in 14 years of trading in the UK – and nothing in the last three years – despite UK sales of almost £400 million in 2011.

The figure is a tiny fraction of its profits compared with the 20 per cent that the charity shop is being asked to pay.

Alun Evans, 63, chairman of the shop, said he was appalled to see global corporations such as Starbucks paying so little.

The retired business executive said: “We can ill afford it. The very fact that they are charging corporation tax to a volunteer business is scandalous.

“Starbucks doesn’t pay corporation tax. The only reason we make a profit is that we volunteer. We would not have any money to distribute otherwise.

A busy Starbucks outlet. The chain has paid just £8.6million in corporation tax over 14 years despite making billions in profit

A busy Starbucks outlet. The chain has paid just £8.6million in corporation tax over 14 years despite making billions in profit

“We’ve been told we are a fantastic example of what the Big Society is about but we are liable to pay corporation tax. It is bullying, picking on the little people.

“We don’t want to pay tax, we want to give any money we make to local causes who desperately need it. They can’t get the money from anywhere else.

“If people donate to us, and they have done in the past, any donation or grant will be treated as income and they would increase our tax. It’s an absolute joke.”

Mr Evans helped set up the store in 2009 to allow elderly and disabled people who were unable to travel to big supermarkets to shop locally.

The shop, which was recently nominated for a regional award, is run by 90 volunteers and has given £15,000 to good causes since opening.

An average of 1,000 customers use the store every week, typically spending £3.20 each – generating an annual turnover of around £160,000

The company was registered as ‘dormant’ by the taxman when it was set up, given its not-for-profit structure.

But at the end of 2011, volunteers were told by HMRC that their case had been reviewed and they would not be exempt from paying corporation tax any longer.

Mr Evans added: “I appealed to get charitable status since our profits are either donated or invested in the long-term future of the shop but they turned us down.”

The shop was forced to pay £1,030 in corporation tax this year. This is 20 per cent of the company’s net taxable profits of £5,150 after depreciation of fixture and fittings was taken into account.

It is the first time the company has paid the tax since its tax status was changed to ‘active’ at the end of 2011.

Customer John Tovey said the shop had changed his life after he lost his sight as a result of diabetes three years ago.

He added: “It’s disgusting. It’s a vital part of this community. If they got forced to close a lot of people would suffer.”

A spokesman for HMRC said: “If a company or organisation is trading, receiving income or carrying out business it is usually deemed to be ‘active’ for corporation tax purposes.

“Most unincorporated associations, including friendly societies and provident societies, are also liable for corporation tax.”

Starbucks had promised to voluntarily pay £10m in corporation tax this year, following mounting pressure against the company.

Category: News

Comments (1)

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  1. Anonymous says:

    What idiots, with proper professional advice they could pay no corporation tax. Set up a charity holding company and donate their taxable profits each year.

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