Starbucks

Starbucks pays UK corporation tax of £8.1m

Payment nearly matches total contributions paid over past 14 years but critics call for coffee chain’s accounts to be more transparent

Starbucks paid nearly as much corporation tax in 2015 as it did in its first 14 years in the UK, after bowing to pressure to scrap its complex tax structures.

However, it still faced criticism for a lack of transparency that makes it hard to determine whether it is paying a fair amount of tax on its frappucinos and espressos.

The Seattle-based coffee house posted a pretax profit of £34.2m for the year to the end of September, up from £2m the year before.

The improvement came despite a dip in sales from £409m to £405m, as it offset the revenue decline by cutting expenses and selling company-owned stores to franchisees.

It also paid £8.1m in corporation tax at a rate of 24%, above the UK corporation tax rate of 20% due to a one-off change in accounting practices.

The tax contribution for 2015 was only slightly less than than the £8.6m it paid over the 14 years after its 1998 UK debut, despite £3bn worth of sales in that time.

Starbucks became the poster child for corporate tax avoidance in 2012 after details of its meagre tax contribution emerged. It was accused of using artificial corporate structures to shift profits out of the UK into lower tax jurisdictions.

The furore prompted a deal with HMRC to waive tax deductions and pay £20m in voluntary corporation tax over two years, including £11.2m last year.

Starbucks has also shut down a UK company named Alki that was part of a labyrinthine network designed to cut taxes at its former European office.

Elements of its European tax structure were ruled unlawful by the European commission in October, with millions of euros of fines expected to follow

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