TAXING TIMES
Trust in corporations is built slowly and betrayed swiftly, as tax-avoiders are discovering. Starbucks, Amazon and Google have all been found to have underpaid their taxes. What does this mean for their reputations?
Andy Barr, co-founder, 10 YetisHMRC has gone on record that part of its plan to recoup what it considers to be lost revenue is to shame culprits via the press and this has certainly paid dividends with Starbucks. The company has reluctantly come to the negotiating table largely because of the public outcry at its entirely-legal tax-avoiding ways. We know that Starbucks is fiercely protective of its global brand so there was no choice but to be seen to be appeasing customers and the UK taxman. Google and Amazon are slightly different in that there is no high street presence where consumers can focus their ire. Add to this the fact that Starbucks customers can go to one of the coffee giant’s competitors, whereas Amazon and Google completely dominate their sectors which also buys them a bit more time with consumers. There is no doubt that these three brands, along with their American owners, have faced significant brand damage here in the UK, but only one, Starbucks, seems to be pro-actively trying to fix the situation.
Erika Uffindell, founder, UffindellFrom a brand perspective the recent tax evasion scandal poses concerns for the reputation of these consumer giants. These brands are an everyday feature of consumers’ lives and are trusted to deliver on their promises. But there is a sense of disappointment in the fact that these large US-based companies are not paying their dues on UK turf, especially as these are challenging times. They want to be seen as part of our communities but this sort of behaviour |
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Andy Poole, associate director, Weber Shandwick ManchesterTax avoidance by large corporations is causing a ripple of resentment among consumers. Although many individuals often begrudge paying taxes, they understand the logic and the benefits of doing so. Law abiding people pay their taxes and can’t understand why large companies shouldn’t do the same. They want companies to pay their share and for those taxes to go back into supporting the economies that they draw profit from. For these reasons, tax avoidance quickly erodes brand loyalty and alienates consumers who think that the company no longer empathises with their own lifestyle and financial circumstances. This can cause scepticism and mis-trust of other corporate values and messages, sowing a seed of doubt in the minds of consumers who are becoming increasingly savvy and selective with their spending. One way to restore reputations is to address the issue head-on with honest explanations and actions. |
