How profitable firms dodge tax

Starbucks sparked outrage by paying only a fraction of his profits to the taxman. Tim Bennett explains how big companies are able to do this, and what investors should beware of.

Squeals of protest (perhaps tinged with envy) greeted a recent Reuters story that coffee giant Starbucks' British unit has paid just £8.6m in tax on more than £3bn worth of sales since it opened in Britain in 1998. And it's not the only one paying a surprisingly low amount of tax. How do firms manage this? And what if anything should investors look out for?

Which tax are we talking about?

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.