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Starbucks Pays Tax For First Time Since 2008

Coffee chain Starbucks told MPs last year it had made a loss for 14 of the 15 years it has operated in the UK, achieving just a small profit in 2006. However, under pressure from politicians and the public the firm committed to pay £20m in corporation tax over two years and the Exchequer has now received the first £5m.

In a fiery showdown with the Commons' Public Accounts Committee last year Starbucks insisted it was "an extremely high taxpayer" globally and acted "to an ethical" as well as a legal standard, despite declaring losses on its UK operation.

Its global chief financial officer Troy Alstead blamed an over-aggressive entry to the UK market which had left it with expensive properties that did not make money.

A Starbucks spokeswoman said: "Six months ago, we felt that our customers should not have to wait for us to become profitable before we started paying UK corporation tax. We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10m in corporation tax this year and a further £10m in 2014.”

Tonmoy Kumar, Manager of the Accounts Department of ABDS comments:
“Starbucks pays 20% mark-up on coffee it buys from Switzerland where it pays only 12% tax.”

If you need any help and advice on SME or the retail industry strategy, contact Lavinia Newman or Peter Ham now to discuss how ABDS can help bring their experience to these matters.

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

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