|>>|| No. 5744
Starbucks operates multiple companies in different countries. The UK division is charged by their offshore division for things such as brand imaging rights and such like. If I recall correctly one of the offshores pays for their bulk purchases like coffee and then the individual national divisions buys it from that offshore at a large markup, resulting in the offshore registering massive profits and the UK division operating a loss. No corporation tax is payable if you're (as in the individual company) not making profit.
There are other methods as well. Buy something off Amazon and you buy a product Amazon have bought from a supplier, shipped it to the UK, had it handled in the UK, sent via UK courier to your UK house but when you placed the order you did so on amazon.co.uk through a company registered somewhere else who then pass it on to the relevant warehouse.
Corporation tax is a pretty antiquated tax. It was designed for an age where manufacturing, production and agriculture were the primary source of economic activity, whereas now it's globalised services in much of the world, especially the first world.
Incidentally I do not think tax avoidance is an INHERENTLY bad thing - what is bad is that it presents an uncompetitive market. Having a really lax tax collection agency can be a good thing in terms of attracting business and investment, likewise can having low taxes to perhaps a net economic or fiscal benefit. The real problem is the playing field isn't flat - you can't really discuss the economic or fiscal advantages or disadvantages if the balance is skewed in favour of those willing and able to avoid it.