Luke Whitmore

Luke Whitmore

Google Plus News author

Starbucks UK tax payments under fire


16 October 2012

The vast coffee chain Starbucks has paid a mere £8.6m in taxes on UK sales since 1998, despite earning an estimated £3bn across their 735 outlets in that time.

MPs and campaign groups are calling for an investigation into the amount of tax paid by the company in the wake of the revelation, although there is currently no evidence that Starbucks has broken the law.

The company is reported to pay tax of 31% globally - a good deal more than the average for a multinational company, which is around 18.5%.

But it pays around 13% tax on overseas income, which is among the lowest rates for consumer goods suppliers.

The company appears to have reported significant losses from its UK subsidiary to HMRC, despite executives making statements elsewhere which seemed to paint a rosy picture of the profits made in the country. In a year in which the company claimed a loss of £26m to HMRC, the chief executive of Starbucks, Howard Schultz, is reported to have told investors that the UK business was successful enough that he wanted to apply the lessons learned to its home territory in the US.

Labour MP for Oldham West and Royton, Michael Meacher, said "HMRC should be having a look at this, especially since they keep saying there should be a crackdown. This has been going on for years and there are many companies involved.

"The fact they have paid 0.3% tax on their turnover is utterly scandalous. If they didn't think they could get away with it, they wouldn't dare do it."

However, Starbucks commented that “We have paid and will continue to pay our fair share of taxes in full compliance with all UK tax laws, as we always have. There has been no suggestion by any authority that we are anything but compliant and good taxpayers.”

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