Starbucks pays no UK tax since 2009

by Calum Fuller

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17 Oct 2012

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AN INVESTIGATION has found coffee giant Starbucks has paid almost no tax in the UK over the past decade – and none since 2009.

Since the chain arrived on British high streets 14 years ago, it has handed just £8.6m over to HM Revenue & Customs, despite sales of more than £3bn, findings from Reuters showed.

Starbucks is the second-largest restaurant or café chain in the world after McDonald's, which paid HMRC about £80m on sales of £3.6bn, according to its UK accounts. By comparison, Kentucky Fried Chicken, the third-largest global restaurant or café chain paid £36m in tax on sales of £1.1bn, according to its books.

The café minimised its tax liabilities by recording substantial losses in its UK accounts year after year, despite telling shareholders the business is profitable.

In 2009, accounts filed in with Companies House claimed a record loss of £52m for the financial year to 27 September, while in a seperate discussion CFO Troy Alstead allegedly told investors that the UK unit was "profitable", reports Reuters.

For 2010, the UK unit reported a £34m loss, but told investors that sales continued to grow. Accounts for the year to September 2011 showed a £33m loss.

While there is no suggestion Starbucks has contravened any laws, it has drawn particular criticism due to the stark contrast between its low tax bills and its upbeat message to investors.

Labour MP Michael Meacher, who last month presented an anti-avoidance bill to Parliament, said Starbucks' practice "is certainly profoundly against the interests of the countries where they operate and is extremely unfair ... they are trying to play the taxman, game him".

"It is disgraceful," he added.

A spokeswoman for Starbucks said: "We seek to be good taxpayers and to pay our fair share of taxes ... we don't write this tax code; we are obligated to comply with it, and we do."

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