Caffe Nero’s tax affairs attract criticism

by Calum Fuller

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08 May 2014

  • Financial Director
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The front of a Caffe Nero

UK COFFEE HOUSE Caffe Nero has been criticised after paying no corporation tax in the last two years, despite posting a pre-tax profit of £21.1m in 2013.

The café - which has more than 500 UK branches - maintains tax-deductible interest payments on debt used to buy the business mean it has not been liable for corporation tax.

But a letter sent by customer Steve Pottinger, who works in the music industry and is also a poet, claiming the company has not been "paying its dues" went viral on Twitter after he posted it on the site in a photograph.

"I'm aware that what you do is perfectly legal," he wrote. "But at a time of austerity when vital services face cutbacks, it sticks in the craw."

He added: "We're all in this together, and without a vibrant and cohesive society - which tax revenues help maintain - you've nowhere to sell your goods.

"At the moment, you're choosing to ignore that. Until such time as you start showing the same loyalty to the common good that you expect your customers to give to your business, I'll be buying my coffee elsewhere."

A spokeswoman for Caffe Nero told the BBC there were "lots of things" in Pottinger's letter that were "factually incorrect", but did not provide any specifics.

The coffee house's holding company is based in Luxembourg, something chairman Gerry Ford said "wasn't set up as a financial engineering thing".

Starbucks, Google and Amazon have all faced public and political backlash over their tax affairs in recent years, with Starbucks last month choosing to relocate its European headquarters to the UK.

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