So you are still taking the line that despite the valid brand value given to the UK subsiduary, and the costs the parent company may incur, and the value to the UK business, the UK business isn't entitled to pay it's parent company and consider that a cost?

To re-visit one of my earlier points, can the UK operation transfer money for buying produce to the parent company and consider that a cost?

Why can't that cost be tax deductable, but the cost of buying (e.g.) coffee beans from the parent company can be?

No posters on this thread have suggested that a business should be able to charge "whatever royalties they want"

What brand value does it give?

If the royalties mean the UK sub. makes a perennial loss, remind me what that "value" is again?

Sal's already explained it.

Would you deem the coffee beans have no value too then?

If you took your emotion about tax avoidance out of this, I don't believe you would try to argue that a brand has no value.

I was thinking of a couple of others posters here, relating their experiences of working in an industry over a number of years, and seeing how the attitude toward customers has changed.

It doesn't have to be "dishonesty", as such, but relates to the entire culture of the customer now being expected to have researched and be an expert in everything they buy, because they cannot rely on a salesperson to necessarily offer the best for them.

We've mentioned it before in relation to financial 'products' for instance.

It's rather surreal, really, to imagine the amount of time one will need to research everything that one might buy in one's life, simply because there is an extent to which companies/banks etc cannot be trusted entirely any more.

No, he didn't.


Hmm. Do coffee beans materialize ready to use in coffee shop premises? Don't think so. Do they need to be grown, processed, packed, transported, delivered etc.? I believe they do.

Having given your question very deep consideration and thought, no, I would not deem the coffee bean to have no value.


Dear fellow, it is hardly a question of 'emotion', now is it? Please be sensible.


You are deliberately obfuscating the point. Which is that if I wanted to run a business and use the Starbucks brand then quite reasonably I would expect to have to pay royalties, if they agreed. Then, as an arm's length transaction, they would have to decide what they wanted me to pay, and I in turn would have to decide if the game was worth the candle.

That is not what is happening here. In essence it is as if I am Starbucks US, and I want to operate as Starbucks UK, but charge myself royalties for using my own brand name. As you, I'm sure, well know.

Is it panto season?



Did the Starbucks brand materialise in the coffee shop premises? Did the UK public magically become aware of it? It needed to be publicised, advertised, protected.


Can you apply the same consideration and thought to the value of the Starbucks brand?




I'm being very clear on the point. Tell me why you would think such royalty charging would be valid in one scenario and not the other.

Is the real difference just that their is more choice now? You didn't need to research different phone deals, savings accounts, power payments, in the past, because there weren't any/many to choose from

I did. I also suggested there is no reason for them to be tax deductible.

In any case the royalties are only supposedly allowed as tax deductible by HMRC if they are deemed essential to the UK companies ability to make a profit. As Starbucks UK makes no profit then the royalties they pay for are clearly not helping them make a profit. In fact they contribute to the loss the company makes.

You can't just set up royalty payments if those payments give you no benefit. The problem lies with HMRC in that it seems obvious this is an abuse of how the royalties are supposed to work and yet they allow it.

And oh, how we suffered.

I was deliberately not just quoting from my own interpretation of my own experience.

As I've said before, I certainly don't think financial institutions are as trustworthy. And I think the choice thing is a fallacy.

For instance, it's a nightmare trying to find a simple, straightforward savings account that pays decently (not wild promises or anything).

Being boringly consistent

I would still say that, in my opinion, much of the 'choice' we have now is not real, meaningful choice. And we know perfectly well that, again, it's a mare trying to work out what is the best way to pay your bills and who to, for instance. And doing things like changing banks for better deals etc is made deliberately difficult (been there etc).

I honestly do not remember anyone complaining that they couldn't choose which water company to pay for their water (or other utility bills). That's subjective – other's may remember differently. But I cannot recall ever having heard comments remotely like that.

I've made the argument before that the massive diminishing of independent retail has reduced meaningful choice – there are reasons that words and phrases such as 'Tescopoly' and 'Tesco Town' have entered the lexicon.

Why do you feel there is no reason for that to be tax deductable, as opposed to other costs?

I hadn't seen anything giving the reason that royalties are deemed tax deductable only on the basis that "they are deemed essential to the UK companies ability to make a profit" If you have seen such information, and you could share it, I'd be happy to read it.



But who has set up royalty payments for something that gives no benefit? The fact that a business isn't making a profit doesn't mean they aren't getting a benefit from their royalties, any more than the aren't getting a benefit from their usage of coffee beans.

Possibly. Starbucks UK could certainly be Baron Hardup, as it makes no money. And you seem to be contributing the buffoon.


Wow, some of these questions are tough. But, I'm guessing not. Am I right?


If Starbucks UK spends publicity money in the UK advertising to the UK consumer this should be tax deductible.

If Starbucks UK needs to protect its brand by trademarking in the UK then ditto though I'm guessing the parent company took out the worldwide protections donkeys ago.


A complete [inon sequitur[/i. You persistently fail to address the simple point that Starbucks is purportedly paying Starbucks for Starbucks' brand. Why this myopia? Starbucked if I know.


What, you need me to explain why it is not valid for me to pay less or no tax, by the ruse of paying royalties to myself? Rather, you explain to me how it is valid. That's the explanation we're missing.