How to humiliate brands via social media

'Don't fly @BritishAirways'? 

For those with an axe to grind and a broadband account to exploit, here are a few ways to dot-complain on social media

• 
• • Arwa Mahdawi
  • theguardian.com, Wednesday 4 September 2013 13.40 BST

Hasan Syed, disgruntled with the way British Airways handled his father's lost luggage, paid $1,000 to promote a tweet that read "Don't fly @BritishAirways. Photograph: Toby Melville/Reuters

As the first law of digita ldynamics states, much of the energy expended within the internet relates to a) porn; b) cats; or c) complaining. The irate customer service tweet or Facebook update is familiar to us all. But while we may be used to people venting their frustrations online, Hasan Syed has just taken the power of anti-social networking to giddy new heights. Disgruntled with the way British Airways handled his father's lost luggage, Syed paid $1,000 (£640) to promote a tweet that read "Don't fly @BritishAirways. Their customer service is horrendous." This has now been seen by tens of thousands of people and promptly picked up by media outlets around the world.

The fine art of complaining has come a long way thanks to technology. Back in the pre-digital day you had to sit down and write a strongly-worded letter if you wanted to call out brands behaving badly. Those wishing to take a more direct approach could go wave a placard or, as a friend of mine once did, superglue your hands to a multinational's revolving doors. Nowadays, however, you can make your voice heard without risking appendages or wasting a stamp. So, for those with an axe to grind and a broadband account to exploit, here are a few ways to dot-complain in the modern age.

1. Bashtag

Last year Starbucks attracted widespread ire after it avoided paying corporation tax in the UK. So, in one attempt to make people feel all warm and fuzzy about its brand again, Starbucks invited the twitterati to display happy holiday messages on a big screen outside London's Natural History Museum in London by using the #spreadthecheer hashtag. Visitors to the Museum were promptly treated to a number of tweets along the lines of "Hey #Starbucks, PAY YOUR FUCKING TAX #spreadthecheer".

Starbucks isn't the first victim of what is termed "bashtagging." Some bright spark at McDonald's once came up with the great idea of letting people share their heart(burn)warming experiences with the brand via a #McDStories hashtag campaign. Voila, tweets like: "One time I walked into McDonalds and I could smell Type 2 diabetes floating in the air and I threw up. #McDStories."

2. Game Google

Google isn't just a search engine, it's a reputation engine. Like it or not, in the eyes of many, you are what you are on Google. And, for several years, former Republican presidential hopeful Rick Santorum found that what he was on Google was a "frothy mix of lube and fecal matter that is sometimes the byproduct of anal sex." This, by the way, wasn't down to a series of questionable decisions by the OED, but the result of a carefully orchestrated campaign by columnist Dan Savage. After Santorum ludicrously compared homosexuality to bestiality in a media interview, Savage gamed Google's search algorithm so that the first result for Santorum that came up linked to a what the New Yorker described as the "unprintable definition" Savage had created to protest Santorum's homophobia.

3. Use your Wifi network name as a targeted billboard

If you live in an area full of upwardly pretentious types you may have noticed a trend of creative Wifi network naming. Instead of settling for LINKSYS53z, for example, a 21st century quipster might call their network PrettyFlyForaWifi. However, as well as using it as a vehicle for unoriginal puns, some people are harnessing their network names to passively-aggressively complain to their neighbours. There is one person in my building whose network is called YOURMUSICSUCKS, for example. I severely curtailed my moments of guilty One Direction pleasure after that appeared.

4. But, wait, the luggage?

While some casual bashtagging or Google-bombing may be cathartic, sometimes catharsis is the only payoff. However, it looks like Syed's $1,000 BA-bashing may have resulted in more than just a warm flush of vengeance. As well as providing fleeting fame, it also seems to have delivered his luggage. Early this morning Syed tweeted "I got what I wanted. I win." Revenge may be a dish best served cold but sometimes, it seems, a little digital degradation can make for a satisfying hors d'œuvre.

From coffee shops to airlines, the trend to 'personalise' products only serves to underline how impersonal services have become

OK, this mug's got my name on it – but that doesn't mean Starbucks cares

• 
• • John Harris
  • The Guardian, Monday 27 May 2013

‘Somewhere between Margaret Thatcher and the fall of Lehman Brothers, there were signs of half-decent customer service.' Illustration by Andrzej Krauze

'A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking," said Andy Warhol. "All the Cokes are the same and all the Cokes are good."

Such was the capitalism that was embodied not just by Coca-Cola, but the Ford Motor Company – and named, towards the end of its dominance, "Fordism". Now, though, we are said to like our transactions personalised and touchy feely. Ergo a summer-long promotion titled "Share a Coke", whereby the usual logo has been replaced by 150 first names – from Aaron to Zoe, via Faisal, Josh, Lauren and Saima. That all this rather cuts across the imperious yet egalitarian brand that Warhol so loved does not seem to have occurred to anyone; nor, apparently, has the whole idea's air of awful tweeness (while writing this, I bought my obligatory "John" bottle from Marks & Spencer, and remained unmoved).

At Starbucks, meanwhile, they now insist that your hot caffeine also comes emblazoned with your name – written on a sticker, to be hollered by a barista. This scheme arrived in early 2012, in a similar flurry of faux-enlightened PR: "Have you noticed how everything seems a little impersonal nowadays?" ran the promotional text.

Unlike the Coke wheeze, though, it was also a see-through attempt at damage limitation: six months later, the company's byzantine tax arrangements would be under intense scrutiny. But in the ordinary world, Starbucks was already becoming a byword for sloppiness and mess, not to mention coffee that tastes like the hot milk my nan used to make me circa 1973. As a former 'Bucks addict, my own epiphany came in their branch in Birmingham's Bullring Centre, where the tables were piled high with dirty cups and plates, only two staff seemed to be on duty – and if the place had been an independent business, you would have taken one look and assumed it was rightly headed for the knacker's yard.

Yet Starbucks is still here, making handsome worldwide profits. Yes, after a major reputational wobble, it has nobly offered to throw £20m over two years at Her Majesty's Revenue & Customs. Hosanna! They now shout your name when they hand you your cup of warm milk and a plywood panini. But going to any of its outlets remains a dependably joyless experience, suggestive of something remarkable: the company is not so much too big to fail, as too big to really care. Once enough competitors are out of the way, it seems, modern branding can work magic: providing you avoid killing anyone, that enough people will carry on trudging through your doors, whatever happens

My own recent experience of sclerotic, unresponsive, mind-bogglingly awful treatment runs from Virgin Media (hours waiting on "helplines", which reached an acme of annoyance when I was offered a choice of what music would be played down the phone – by genre), through the train giant First Great Western (frequently late, insane ticket prices) and on to such behemoths as McDonald's (vast queues) and PC World (don't get me started). When it comes to the ubiquitous Amazon, there are once again lines to be drawn from its tax arrangements, through standards of service – I have long given up on its "next day" delivery option – to its predatory behaviour, last seen when it hiked up its fees to independent "marketplace" sellers by up to 70%.

Running through a lot of this, I would imagine, is much the same business model: workforces hacked down to the bare minimum and poorly paid, the apparent belief that if you track your customer's buys via data accumulation and give them what you think they want, more quaint ideas of customer service can be dumped, fast.

To all this, there is an obvious enough response: hasn't a mixture of flimsy "personalisation" and arrogant business–as-usual always been the capitalist way? Perhaps. But somewhere between the arrival of Margaret Thatcher and the fall of Lehman Brothers, there were at least fleeting signs of an embrace of half-decent customer service – as proved by plenty of businesses, not least the big British supermarkets.

Bear with me, please. Though I cannot quite date them, I have clear memories of visiting Tesco, Asda and Sainsbury's, and realising that though they were strangling independent competitors, squeezing producers and offering an illusion of choice under which lay a remarkably Fordist way of operating, their customer service was actually very good. You may recall the dedicated bag-packers, or the staff's breezy openness to being sent to scour the aisles when you reached the checkout and realised you'd forgotten the broccoli .

More often than not, my own supermarket shopping now ends with an exasperated glimpse of gridlocked checkouts, and the usual trudge through the self-service terminals sometimes known as "the fast lane": a con trick that would have caused Marx and Engels to hoot with mirth, whereby the customer now doubles as the worker. I contacted Sainsbury's, Asda and Tesco to ask how many were now in operation, and what the increasing dominance of fast lanes meant. Their replies were uniformly evasive, and the one from Tesco was particularly grim: "We believe in giving our customers choice. Over a third of shoppers choose to use self-service tills, not least because they find them quicker and more convenient. For customers who need assistance, there is always a member of staff on hand." Somewhere in those words is the same arrogance you can taste in your average grande skinny cappuccino and granola bar.

There is, then, a new model of business, which rather puts me in mind of words uttered not by Andy Warhol but the market traders of the West Midlands. "Never make a mug of your punter," they used to say. But that is what modern business does. And strangest of all, contrary to all that stuff about consumer sovereignty, it seems to be not just getting away with it, but prospering.

You think the government is fighting tax avoidance? Think again

George Osborne has pulled off a stunning confidence trick: he has bamboozled people into thinking he is fighting tax dodgers

• 
• • Richard Brooks
  • The Guardian, Sunday 17 March 2013 21.00 GMT

‘Chancellor George Osborne's new rules – as KPMG makes clear – give “UK-based multinationals an opportunity to significantly reduce their tax rate”.’ Photograph: Carl Court/AFP/Getty Images

Chancellors of the exchequer have never been entirely straight about their tinkering with the tax system. With his penchant for "stealth taxes", Gordon Brown certainly didn't always come clean with the British public. But when it comes to the vexed subject of tax avoidance, his successor George Osborne has taken the deception to a new level and, after three years, pulled off a stunning confidence trick.

"The parties agree that tackling tax avoidance is essential for the new government, and that all efforts will be made to do so," declared the coalition agreement in May 2010. The commitment was a victory for the Lib Dems and for their pre-election shadow chancellor Vince Cable in particular. A year earlier, Cable had responded to the Guardian's Tax Gap series by writing: "Systematic tax avoidance by rich individuals and UK-based companies strikes a particularly ugly note in these straitened times."

Cable's prize was to be a "general anti-avoidance rule", and soon enough one of Britain's leading tax QCs, Graham Aaronson, was dispatched to work up the scheme that Osborne has promised to introduce in this week's budget. But it will be what Aaronson describes as "narrowly focused", and apply only to the "most egregious tax avoidance schemes". For which, read convoluted arrangements involving multiple transactions that circumvent the spirit of the law – of the sort deployed by comedian Jimmy Carr before he saw the light (or the headlights of career death hurtling towards him).

Scheming of this type is, however, a relative minority sport, and is generally defeated by judges increasingly intolerant of tax avoidance anyway. Worse still, the senior tax inspectors' union argues that, by hitting just "egregious" cases, the new law risks "actually facilitating avoidance".

By far the costliest tax avoidance takes the form of the corporate structuring that has repeatedly hit the front pages in the last couple of years, whether through Starbucks' payment of royalties to Amsterdam, Amazon's Luxembourg sales hub or Vodafone's multibillion-pound internal financing arrangements through the same grand duchy. And,as the Lords economic affairs committee pointed out last week: "There is a misconception that Gaar [general anti-abuse rules] will mean the likes of Starbucks and Amazon will be slapped with massive tax bills. This is wrong, and the government need to explain that to the public."

Such corporate manouevrings do not officially constitute tax avoidance even if, on any commonsense view, that is exactly what they are. When a couple of years ago the BBC commissioned a ComRes survey on attitudes to tax avoidance, it defined the practice as "where people or businesses arrange their financial affairs to minimise the amount of tax they pay while remaining within the law". Eighty four percent of people favoured a clampdown on the behaviour, which clearly encompasses multinational's offshore structures.

Yet this is where the great tax trick is played. Outside the official definition of tax avoidance, the offshore schemes of Britain's biggest multinationals have not just escaped any clampdown, they have been rewarded with a rewriting of corporate tax law that makes them more irresistible than ever. Working closely with the companies most affected, in his last two budgets Osborne has relaxed – almost to the point of obsolescence – the so-called controlled foreign companies laws that were introduced by Nigel Lawson in the early 1980s to prevent companies shifting profits into their tax-haven subsidiaries.

From this year offshore financing structures such as Vodafone's, for instance, will be taxed at no more than 5%, while companies' tax-haven branches will be exempt from tax. Incredibly, the British government is subsidising the largest companies to send billions of pounds into the world's tax havens. And in the absence of any opposition from the Labour party – compromised by its own record of offshore tax relaxations and now advised by Vodafone's tax consultant PricewaterhouseCoopers – the new laws have arrived on the statute book unchallenged.

The big four accountancy and tax consulting firms that were hauled before Margaret Hodge's public accounts committee a few weeks ago are probably licking their lips. KPMG touts for business in one of its pamphlets by pointing out: "For every £1m of finance income received in the UK, the finance company regime could save cash tax of £165,000." And even better: "As the new rules have been designed and enacted by the government, this should represent a low-risk tax-saving opportunity." What could be sweeter than state-endorsed tax avoidance?

This surreptitious slashing of corporate tax bills is not something the government is keen to dwell on. Indeed, the rhetoric can be very different. In Davos, David Cameron said that businesses are "setting up ever more complex tax arrangements abroad to squeeze their tax bills right down ... Well, they need to wake up and smell the coffee". Given low corporate tax rates, soon to be 21% and by far the lowest among G8 countries, the PM insists they "should pay that rate of tax rather than avoid it".

But Osborne's new rules – as KPMG makes clear – give "UK based multinationals an opportunity to significantly reduce their tax rate". In other words, using "tax arrangements abroad" the largest multinationals won't pay even the new all-time-low headline tax rates.

Through the "general anti-avoidance rule" and a regular stream of smaller specific anti-avoidance announcements, such as this weekend's move against a national insurance dodge, Osborne will sustain the illusion that tax avoidance is being fought on all fronts, confident that his bamboozled audience will never notice the abject surrender on the most important one of all.

Google's tax avoidance is called 'Capitalism'

 Google chairman Eric Schmidt has insisted that he is "very proud" of the company's tax structure, and said that measures to lower its payments were just "capitalism". 

 

Also read Britain could end these tax scams by hitting the big four accountancy firms

 

Mr Schmidt's comments risk inflaming the row over the amount of tax multinationals pay, after it emerged that Google funnelled $9.8bn of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill. Photo: Bloomberg News

 

By Telegraph Staff

6:50PM GMT 12 Dec 2012

 

Mr Schmidt's comments risk inflaming the row over the amount of tax multinationals pay, after it emerged that Google funnelled $9.8bn (£6.07bn) of revenues from international subsidiaries into Bermuda last year in order to halve its tax bill.

However, Mr Schmidt defended the company's legitimate tax arrangements. “We pay lots of taxes; we pay them in the legally prescribed ways,” he told Bloomberg. “I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.”

“It’s called capitalism,” he said. “We are proudly capitalistic. I’m not confused about this.”

In Britain Vince Cable was unimpressed by Mr Schmidt’s views. The Business Secretary told The Daily Telegraph: “It may well be [capitalism] but it’s certainly not the job of governments to accommodate it.”

A Californian pressure group called Consumer Watchdog wrote to the Senate’s Finance Committee demanding a hearing on Google’s “global tax avoidance strategies”.

Consumer Watchdog’s director John Simpson called for the Committee to schedule a time for Mr Schmidt and Google’s chief executive could “testify under oath and explain their company’s apparent abuse of the tax code to the detriment of all who play fairly.”

Mr Simpson urged the Senate to work with “other countries’ tax authorities” to “put an end to egregious loopholes that allow cynical exploitation by this generation’s Robber Barons.”

“Governments in Europe, many of which have been targets of Google’s morally bankrupt tax policies, are actively seeking redress,” he wrote. “But this is not a problem that only impacts other countries’ revenues. Google’s tactics strike at the US Treasury as well, forcing the rest of us to make up for the Internet giant’s unwillingness to pay its fair share.”

He added: “What makes Google’s activities so reprehensible is its hypocritical assertion of its corporate motto, 'Don’t Be Evil'.”

Documents filed last month in the Netherlands show that Britain is Google’s second biggest market generating 11pc of its sales, or $4.1bn last year.

But the company paid just £6m in corporation tax. Overall, Google paid a rate of 3.2pc on its overseas earnings, despite generating most of its revenues in high-tax jurdisdictions in Europe.
The company reportedly uses complex tax schemes called the Double Irish and Dutch Sandwich, which take large royalty payments from international subsidiaries and pay tax in low rate regimes.
By channelling its revenues through Bermuda, Google avoided $2bn of global income levies last year.

The tax arrangements add fuel to accusations made by British MPs that Google and other firms including Starbucks and Amazon, have been “immorally” minimising its tax bills.
 
Matt Brittin, Google’s UK boss, said MPs were blaming companies for a system that they had designed. “Google plays by the rules set by politicians,” he said. “The only people who really have choices are politicians who set the tax rates.”

Last week, Starbucks caved into public pressure and promised to pay £20m to the Treasury over the next two years. However the trigger more criticism of “optional” tax payments.

Britain could end these tax scams by hitting the big four accountancy firms

The spiders spinning the web of avoidance are the major accountancy firms who make billions from the public purse

• 
• • Polly Toynbee
  • The Guardian, Monday 10 December 2012 21.00 GMT

A Starbucks protest on 8 December. ‘A clever protest on the right issue can catch public imagination and media attention.' Photo: Antonio Olmos for the Observer

Sometimes it only takes a spark. Never imagine nothing can be done: UK Uncut packs a punch far above its weight, as did the suffragettes, slave trade abolitionists and most causes great and small. A clever protest deftly done on the right issue can catch the public imagination and the media's attention: now the public accounts committee investigates and the government is obliged to pledge action.

At Saturday's Starbucks occupation of 40 coffee shops, the point was easy to explain to passers-by: companies massively avoiding tax help to cause the cuts that shut libraries, Sure Starts and women's refuges. This short occupation with an orderly exit and loud chants causes Starbucks deep reputational damage. Costa, nearby, does pay its taxes, while Starbucks avoids its duty to the civilised society it depends on.

Take note, all other corporate avoiders: Manchester Business School estimates that Starbucks will see a 24% drop in sales over the next year, from the experience of reputational crises in 50 other companies. The eye-popping stupidity of choosing this same week to cut its staff's paid lunch breaks and sickness and maternity pay suggests a company whose only efficiency is in tax-avoiding. The £20m it offers as a "donation" to HMRC may even be tax deductible: it can offset this "overpayment" against future tax, once public attention has drifted elsewhere, adding to the phenomenal recent drop in corporation tax receipts, as companies copy one another's avoidance schemes.

In 2009 the Guardian's tax gap series kicked off this debate, exposing devious but legal devices such the "double Luxembourg", the "Dutch sandwich" and Roger the Dodger of Barclays. This is the most dangerous kind of investigation, where any mis-step risks lethal lawsuits from those with deep enough pockets to kill: it cost us £100,000 in lawyers' fees alone, plus months of journalists' time digging into opaque company accounts. We told how Boots, bought by private equity firm KKR, abandoned its Nottingham home to put its HQ in Zug, the Swiss tax haven. By loading the company with debt, its tax bill dropped from £606m to £74m – and Barclays lent them billions to do it. GlaxoSmithKline and Astra Zeneca moved to Puerto Rico and Shell took its trademark to Switzerland. Diageo transferred brand names to a Dutch subsidiary, so Johnnie Walker whisky paid just 2% tax.

How did they put the profits from a whisky blended in Kilmarnock into low-tax Amsterdam? Deloitte did it, reportedly so proud they broke open champagne when it went through. And that is the crux of the matter. At the heart of almost every tax-avoiding scheme is one of the big four accountancy firms – Deloitte, PricewaterhouseCoopers (PwC), KPMG and Ernst & Young.

Tax campaigner Richard Murphy, whose razor-sharp work with the Tax Justice Network fuels so much of this campaign, says these four are at the heart of the worldwide web of avoidance, with offices in all the main tax havens. PwC explained on the radio last week that the reason it had large offices in Bermuda was to audit the local hospital. Few clients could use these havens without one of the big four as auditor: virtually no business happens in havens, but bankers, lawyers and accountants need to be located there.

The four have a grip on the auditing of many major firms. The dogged work of accountancy professor Prem Sikka shows how they work, cold-calling to offer elaborate tax schemes. They hardly ever give bad audits to companies hiring them, and despite grave failures in auditing banks, they are not disciplined by professional accountancy bodies. Nor does the Treasury recover costs, even when successfully challenging their elaborate scams.

The public accounts committee last week gave a satisfying roasting to three boutique tax-avoidance firms. Margaret Hodge tore a strip off them, as one admitted that all his schemes had been declared illegal and shut down. But now the committee needs to go after the big four: none of this could happen without them. In his autumn statement George Osborne declared – as chancellors always do – that he would pursue avoiders. But he replaced only a fraction of the Revenue's cuts, with another 10,000 staff still to be lost.

If Osborne were serious, stern regulation could stop all this. As it is, companies that pay their auditors £700 an hour will sometimes undeservedly get a clean bill of health, as did Northern Rock, HBOS, Bear Stearns and the rest. One radical suggestion is that the National Audit Office should take charge of all big company auditing itself, paid by a levy according to company size: it would protect shareholders from inadequate audit and taxpayers from avoidance. Banks are still receiving clean audits, despite the governor of the Bank of England declaring them to be zombies paralysed by undeclared bad debt.

So far attacks on tax avoidance focus on the web, but now it's time to go for the spiders that spin it. The same firms that conspire to deprive the state of revenues are paid large sums as consultants by the very government they weaken. KPMG, along with McKinsey, is conducting much of the sale of the NHS to private contractors. If you want to see this curious contradiction, look no further than PwC's website, which blends its contrary functions in one sentence: "Our Government and Public Sector practice comprises over 1,300 people, more than half of whom work in our consulting business, with the remainder in assurance and tax."

Osborne has announced a consultation on making honest tax payment a condition of winning government contracts. But these companies are woven into every aspect of government and business. The chair of the NAO, Sir Andrew Likierman, is a director of Barclays and past president of the Chartered Institute of Management Consultants. The NAO auditor general, Amyas Morse, was previously global managing partner at PwC. Meanwhile, accountancy firms are major donors to the Conservative party.

With political will, all this can be cleaned up. However remiss in office, Labour should seize the initiative. The OECD is urging the G20 to agree on a fair system for taxing companies according to where profits arise – though countries are locked in cut-throat corporation tax competition. However, the UK controls most tax havens and could shut them down overnight if it copied Charles de Gaulle: angered by tax scamming, he once surrounded Monaco and cut off its water supply until it relented.

Forget Bermuda, Britain's tax havens are much closer to home

It's easy to point a finger at Amazon and co, but UK-based trusts make it easier than ever for the rich not to pay their share

• 
• • Polly Toynbee
  • The Guardian, Thursday 15 November 2012 21.00 GMT

There are many UK companies that offer trusts 'guaranteed to protect almost all your wealth from inheritance tax'. Photograph: Image Source/Alamy

The hottest ticket this week was a ringside seat for the public accounts committee's roasting of tax-avoiding Starbucks, Google and Amazon. Committee chair Margaret Hodge in full flight gave them a magnificent tongue-lashing, with Tories hot on her heels too, pouring derision on "don't be evil" companies' pretence to make next to no profit as they siphon cash into tax havens. Even the comptroller and auditor general lost his temperand called their evidence "insulting".

These are only opening salvos, as the Germans and French take aim too against companies pretending their profits arise in Bermuda or Luxemburg. John Lewis's managing director is calling on the Treasury to demand tax is paid in the country where profits are made:Amazon made £3.3bn in sales but paid zero UK corporation tax on any of the profits of that income. "They will out-invest and ultimately out-trade us," tax-paying John Lewis protests, unable to compete fairly with tax-shirkers. This should be easy to fix. Vince Cable says he's angry – but HMRC could refuse to accept these companies' accounts.

Everyone can point a shocked finger at foreign giants who bamboozle or intimidate our tax collectors. But the culture of avoidance runs deep. Labour tiptoed round the edge of the tax avoidance industry, chased off by City blusterers who called tougher tax collection a Labour stealth tax. But since the crash, the collapse in tax revenues has created soaring national debt, so the need for the Treasury to collect every penny owed has become more pressing. The culture of getting away with what you can has to give way to a popular understanding that one man's tax dodge is his own community's lost children's centres, libraries and swimming pools. So where does it all begin?

In a sedate Sussex hotel, St James's Place Wealth Management invited a flock of retired people of comfortable means to one of their genteel sales pitches on how to avoid tax. Observing unannounced, I listened to them selling their Rolls Royce anti-tax vehicles and investment funds: one fund was so stellar that it grew in 30 years from £30,000 to £2.7m – and how the room gasped in admiration. Yes, yes, we were all well warned that investments can go down as well as up, but the upside of that £2.7m looked more compelling than any risk. But the real seller for these elderly people concerned ways to avoid "uninvited guests at the sharing out of your estate". Those "uninvited guests" are the rest of the nation's taxpayers.

The atmosphere was impish and jocular, with the taxman as pantomime villain. Shocking stories were told of what befalls the estates of those without cunning advisers. Charles Clore lived abroad to avoid tax, but because he foolishly wanted to be buried "back home", the taxman deemed he was not really resident abroad at all and his whole estate was subject to inheritance tax. Gasps of shock. On screen, up came Prince Philip's whimsical remark that "All money nowadays seems to be produced with a natural homing instinct for the Treasury" – though in his case money makes the reverse journey from the Treasury to his trouser pocket. "Taking the worry out of wealth," was the theme, as one presenter promised: "We can protect your money from the dangers of tax," explaining how to offshore money.

But the big sell is trusts, special ones devised for this company's clients, guaranteed to protect almost all your wealth from inheritance tax. They are right, it can be done easily. Put all moveables and all cash and investments into a discretionary trust, and it passes to your heirs without tax as soon as you die, not even waiting for probate. It counts as a gift so the beneficiaries need pay no tax either. Called a "discretionary trust", as technically St James's are the legal trustees, the discretion in fact remains in all but name with you: the company will do whatever you ask, so you still control the fund and you can still take money from it. But for reasons that defy basic tax fairness, it avoids all inheritance tax. Why?

Even worse, hard-pressed local authorities are denuded by these trusts too. As St James's advisers eagerly pointed out, if you hide away your assets in a trust, it can't be counted when calculating how much you should contribute to your care if you need to go into a residential home. He warned that could be £1,300 a week in fees – more gasps – so why let your council take your money when you can salt it away safely in a trust? Let poorer taxpayers pick up the bill instead.

Richard Murphy, tax campaigner and adviser to the public accounts committee and others, says no one knows how much money passes through these trusts. They are opaque, unregistered and the taxman neither knows if they exist nor what's in them. Far more tax is probably avoided this way than the mere £3bn collected in inheritance tax: only 3.5% of estates pay it – and they may not be the richest. Why any Labour chancellor – or Tory for that matter – lets this dodge persist is a mystery. Inheritance is a neuralgic political topic, ever since the issue panicked Gordon Brown into ducking an election in 2007. But since so few estates pay it, it's hard to see why the 96.5% of ordinary taxpayers who never leave enough to get above the £650,000 couples' inheritance tax allowance would not support ending this loophole for the rich.

Meanwhile, the public accounts committee is summoning back Amazon after this week's "deliberately evasive" display of "outrageous" ignorance by one of their executives: he didn't know who owns their Luxembourg-based holding company that pays a fraction of the UK's tax rate. The return match is not to be missed. Margaret Hodge is calling for complete transparency to stop companies claiming "commercial confidentiality" to hide their accounts. She wants aggressive avoiders to be named and shamed and denied public contracts, and she suggests the public boycott tax avoiders.

On 8 December UK Uncut is protesting against Starbucks, setting up creches, libraries and women's refuges in the coffee shops, as payback for services that might stay open if Starbucks paid fair tax. Is it time the committee looked at how the likes of PricewaterhouseCoopers, KPMG, Accenture and McKinsey devise ever more elaborate tax dodges for their clients, yet with the other hand seize ever fatter contracts from the state they help strip bare of revenues?

A roll call of corporate rogues who are milking the country

The scale of unpaid tax now outstrips the entire deficit. Forcing the elite to pay up is a matter of both justice and necessity

• 
• • Seumas Milne
  • The Guardian, Tuesday 30 October 2012 22.20 GMT

Police officers protect a Starbucks outlet in Oxford Street during the TUC anti-austerity protest in London on 20 October 2012. Photograph: Suzanne Plunkett/Reuters

 

'Only the little people pay taxes," the late American corporate tax evader Leona Helmsley famously declared. That's certainly the spirit of David Cameron and George Osborne's Britain. Five years into the crisis, the British economy has just edged out of its third downturn, but construction is still reeling from government cuts and most people's living standards are falling.

Those at the sharp end are being hit hardest: from cuts to disability and housing benefits, tax credits and the educational maintenance allowance and now increases in council tax while NHS waiting lists are lengthening, food banks are mushrooming across the country and charities report sharp increases in the number of children going hungry. All this to pay for the collapse in corporate investment and tax revenues triggered by the greatest crash since the 30s.

At the other end of the spectrum though, things are going swimmingly. The richest 1,000 people in Britain have seen their wealth increase by £155bn since the crisis began – more than enough to pay off the whole government deficit of £119bn at a stroke. Anyone earning over £1m a year can look forward to a £42,000 tax cut in the spring, while firms have been rewarded with a 2% cut in corporation tax to 24%.

Not that many of them pay anything like that, even now. The scale of tax avoidance by high-street brand multinationals has now become clear, in no small part thanks to campaigning groups such as UK Uncut. Asda, Google, Apple, eBay, Ikea, Starbucks, Vodafone: all pay minimal tax on massive UK revenues, mostly by diverting profits earned in Britain to their parent companies, or lower tax jurisdictions via royalty and service payments or transfer pricing.

Four US companies – Amazon, Facebook, Google and Starbucks – have paid just £30m tax on sales of £3.1bn over the last four years, according to a Guardian analysis. Apple is estimated to have avoided over £550m in tax on more than £2bn worth of sales in Britain by channelling business through Ireland, while Starbucks has paid no corporation tax in Britain for the last three years.

The Tory MP and tax lawyer Charlie Elphicke estimates 19 US-owned multinationals are paying an effective tax rate of 3% on British profits, instead of the standard rate of 26%. It's all entirely legal, of course. But taken together with the multiple individual tax scams of the elite, this roll call of corporate infamy has become an intolerable scandal, when taxes are rising and jobs, benefits and pay being cut for the majority.

Not only that, but collecting the taxes that these companies have wriggled out of would go a long way to shrinking the deficit for which working- and middle-class Britain's living standards are being sacrificed. The total tax gap between what's owed and collected has been estimated by Richard Murphy of Tax Research UK at £120bn a year: £25bn in legal tax avoidance, £70bn in fraudulent tax evasion and £25bn in late payments.

Revenue and Customs' own last guess of £35bn has been widely recognised as a serious underestimate. But even allowing for the fact that it would never be possible to close the entire gap, those figures give a sense of what resources could be mobilised with a determined crackdown. Set them, for instance, against the £83bn in cuts planned for this parliament (including £18bn in welfare) – or the £1.2bn estimated annual benefit fraud bill – and you get a sense of what's at stake.
Cameron and Osborne wring their hands at the "moral repugnance" of "aggressive avoidance", but are doing nothing serious about it whatever. They've been toying with a general "anti-abuse" principle. But it would only catch a handful of the kind of personal dodges the comedian Jimmy Carr signed up to, not the massive profit-shuffling corporate giants have been dining off.

Meanwhile, ministers are absurdly slashing the tax inspection workforce, and even introducing a new incentive for British multinationals to move their operations inbusiness to overseas tax havens. The scheme would, accountants KPMG have been advising clients, offer an "effective UK tax rate of 5.5%" from 2014 (and cut British tax revenues into the bargain).

It's not as if there aren't any number of measures that would plug the loopholes and slash tax avoidance and evasion. They include a general anti-avoidance principle (of the kind the Labour MP Michael Meacher has been pushing in a private member's bill) that would outlaw any transaction whose primary purpose was avoidance rather than economic; minimum tax (backed even by the Conservative Elphicke); and country-by-country financial reporting, and unitary taxation, to expose transfer pricing and limit profit-siphoning.

The latter would work better with international agreement. But there is already majority support in the European Union, and it is governments in countries such as Britain – where the City is itself a tax haven – that are resisting reform. When you realise how closely the tax avoidance industry is tied up with government and drawing up tax law, that's perhaps not so surprising.

But when austerity and cuts are sucking demand out of the economy, fuelling poverty and joblessness and actually widening the deficit, the need to step up the pressure for corporations and the wealthy to pay their share as part of a wider recovery strategy couldn't be more obvious.

The target has to shift from "welfare scroungers" to tax dodgers, and the campaign go national. Companies that are milking the country at the expense of the majority are especially vulnerable to brand damage. Forcing them to pay up is a matter of both social justice and economic necessity.

Sexpresso coffee shops take Seattle by storm

By Andrew Gumbel in Los Angeles

Published: 05 February 2007

At the Sweet Spot Cafe in the northern suburbs of Seattle, you get more than a foam topping on your cappucino. You get a waitress in a bikini, or maybe a tight-fitting T-shirt, and a choice of drinks with names such as Wet Dream (with caramel and white chocolate), Sexual Mix (a caramel macchiato) or Erotic Pleasure.
South of the city, in Tukwila, the baristas at Cowgirls Espresso wear sheer negligees and visible pink panties. It's the same story in any number of other suburban bars and drive-through stands, like the Natte Latte in Port Orchard or Moka Girls in Auburn - bikinis, racy lingerie, fetish clothing, and plenty of suggestively exposed flesh.
At Best Friend Espresso in Kenmore, at the northern end of Lake Washington, the outfits take their inspiration from Playboy-style sex fantasies. The staff will go for the naughty schoolgirl look one week, then don black-framed glasses the next to look like sexy secretaries.
Welcome to "sexpresso" - the latest coffee fad to hit America, in which the country's seemingly boundless fascination for Italian-style Java is combined with its equally boundless fascination for half-naked women.
Seattle may not be the first American city to come to mind when it comes to the pleasures of the flesh, but it is super-saturated with coffee stands, all of which are battling each other - and the mighty, locally based behemoth that is Starbucks - to give morning commuters an extra reason to stop off at their particular establishment.
"Here on Aurora Avenue, there's a drive-through every 20 blocks. You have to do something to stand out," said Sarah Araujo, owner of The Sweet Spot. Ms Araujo brainstormed with her customers to come up with something new and different when she bought the cafe - then called Aurora Espresso - a couple of years ago.
Not only did her staff start removing clothing and giving suggestive new names to the drinks, they also started doing theme days - Tube Top Tuesdays, Wet T-Shirt Wednesdays and Fantasy Fridays.
The plastic coffee cups are indistinguishable in shape from those sold in any other coffee shop in north America. But they are decorated with the silhouette of a busty naked woman carrying a steaming mug of "Joe". The lid is sealed with a pink lipstick kiss.
During the summer, when the persistent Seattle rain finally lifts and the Pacific Northwest enjoys a few months of real sunshine, The Sweet Spot organises bikini car washes and takes care to post the most suggestive photographs on its website. This year, the cafe is planning a barista calendar.
Coming with a theme for a coffee bar is nothing new in America. In Los Angeles, there are cafes where you can buy second-hand books, get cut-price legal advice, throw pots, or listen to really, really bad live music provided by local bands. Strangely, nobody until now has thought of combining coffee with sex.
Ms Araujo and others say it has given an unmistakable boost to their businesses. Their staff may only receive minimum wage, but the tips can be terrific.
"Our customers may be half-asleep when they get here, but we do what it takes to wake them up," said Ms Araujo. "They always say: 'Thanks for the great cup of coffee and the smile; it made my day'."
Some local puritans have expressed disquiet - and railed at The Seattle Times newspaper after it ran a feature on the sexpresso trend 10 days ago. But law enforcement officials say there is nothing illegal about wearing scanty clothing, so the trend is almost certain to keep spreading.
Even Seattle, though, has its limits. Sexy underwear is all very well, but the city hardly has the climate of French Polynesia.
"We're not in bikinis right now," Ms Araujo conceded in the murky early hours of yesterday. "We're going more for miniskirts and boots. It's pretty cold up here."

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