Saturday, April 09, 2016

Cutting the perks to keep the profits

Caffe Nero will no longer provide its staff with a free lunch while on shift following the introduction of the new National Living Wage.  Employees at the coffee chain were told in a letter that the perk would end on 11 April following the introduction of the new minimum wage for over 25s of £7.20 per hour.

The company said it was looking into new ways to cut down on costs.

They will offer a 65% staff discount across the entire food range but staff told the their food choices were now being restricted.

"Before the National Living Wage increase we were allowed to order whatever we wanted off the menu. Now we're only allowed to order a plain margherita or a plain cheese and tomato pasta. Any additional toppings we have to pay for at cost price.”

In 2015 Caffé Nero was attacked for tax avoidance. Caffé Nero had not paid corporation tax in the UK since 2008, despite racking up sales worth £1.2 billion. Tory MP Ian Liddell-Grainger said: “This is a company, effectively based in Luxembourg, … They appear to only be interested, selfishly, in the bottom line and profits.”

Despite making around £20 million a year in profits, the company pays no corporation tax in the UK, according to chartered accountant Richard Murphy of Tax Research UK. Murphy analyzed Caffé Nero’s tax structure last year to uncover how the company managed to avoid paying the 21 percent tax rate for firms earning profits of £1.5 million or more. He concluded that Caffé Nero’s complicated tax structure, which operates via Luxembourg and the Isle of Man, “stripped profits that would otherwise be liable to UK tax and leaving nothing due in this country.”

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