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Starbucks to pay £20m Corporation Tax

In October, it was revealed the Starbucks paid just £8.6m in Corporation Tax (CT) in the UK over a 14-year period, despite making a profit of £3bn and reported accounting losses where it was profitable.

In November, Starbucks’ UK executives appeared before the Public Accounts Committee to answer questions relating to this issue, now, after weeks of media and public pressure their UK Managing Director announced they would pay a higher rate CT than required by law. He also announced the company would not claim tax deductions for royalties and inter-company charges, and would "open its books" to HMRC on an ongoing basis to ensure transparency.

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“This move showed how important reputation is multinationals such as Starbucks and to rebuild the trust with the British public.”

HMRC also issued a statement following Starbucks' website announcement, saying corporation tax is "not a voluntary tax".

"Parliament sets out the rules and rates for businesses to follow," said a spokesperson.

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Hopefully this episode will encourage more businesses to pay corporation tax, it shows it is an issue that needs to be on the boardroom agenda of every company."

If you need any help and advice for your business on Corporation Tax or VAT  contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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