Starbucks' tax bill shows truth will out

In early 2011, British firm Vodafone faced protests from (then lesser-known) pressure group UK Uncut, which accused it of avoiding a proportionate tax bill. But it is only recently that this has become a mainstream narrative and a major reputational challenge for Britain’s biggest employers.

Foreign multinationals are the latest to face a grilling from both Parliament and the media. Last week Google and Amazon were hauled over the coals for paying comparatively miniscule UK corporation tax, along with coffee behemoth Starbucks. And when the Chancellor starts using ‘fair tax payment’ as positive narrative around his Autumn Statement you just know this is a story that will run and run.

Hence, there was a brave statement from Starbucks on Sunday, which admitted it ‘needed to do more’ about tax contribution to Britain’s dwindling coffers.

Though the Government has wisely dropped its ‘we’re all in this together’ strapline around austerity Britain – hardly tenable after George Osborne reduced the top rate of income tax – it is a sentiment that nevertheless has become part of the public consciousness.

The new age of transparency and fierce scrutiny, so often written about here, has already impacted politicians (through the MPs’ expenses scandal) and the media (through ‘hackgate’ and the Leveson Report). It is now turning its ugly, revolutionary head towards large corporations.

Where once these blue chip firms could ‘manage perceptions’ through clever news management and spin, the sensible ones are recognising this is no longer an option. Such is the level of scrutiny and media aggression that the truth will out surrounding the actions of big business.

The upshot is that smart comms directors and chief executives are finally accepting it is better to tackle such ethical issues head on.

Starbucks, which has made such reputational headway in the US, should be applauded for saying it needs to contribute more financially to a society that offers such profitable business. Of course, it now needs to back this up by actually paying a much higher level of tax. But it can be sure the politico-media establishment will not let it off the hook any time soon.

Other firms should look and learn. It is not just journalists who are on your back. Most of your other stakeholder groups, including thousands of valuable staff, are there too.

This article was first published on prweek.com