I’m always suspicious of middle aged men with stoopid facial hair, but Steve Pottinger’s letter to Café Nero about it not paying taxes is fun. Predictably, because of the Starbucks debacle, this got picked up by various media outlets none of which appear to have picked up on the bigger picture; Café Nero avoids paying taxes because it has a lot of debt and the interest it pays on this is tax deductible.
This is integral to the private equity business model – what Café Nero does (or doesn’t when it comes to paying taxes), pretty much every other private equity owned company does as well, meaning shops like Poundland, McColls and Pets At Home. You could also add Boots (from memory) to the list and utterly ghastly bastards like Wonga.
The tax treatment of private equity is a big deal I reckon, but then so is the tax treatment of transfer payment malingering multinationals, but hey ho, we’re all in this together, green shoots of recovery, galloping social and economic inequality and all that.