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Starbucks UK to start paying taxes

June 24, 2013

The days of Starbucks UK avoiding £20 million in corporation taxes over the past two years are gone, according to the Daily Mirror. Under pressure from politicians and the public, it has committed to pay the taxes, starting by giving £5 million to the Treasury this week, according to the story.

UK Uncut, a network of United Kingdom-based protest groups that protest against tax avoidance in the UK, urged customers to boycott Starbucks cafes when it looked as if theAmerican-based coffee giant had paid hardly any corporation tax in the UK since 2008. Starbucks insisted it had made a loss for 14 of its 15 years in Britain, which allowed it to avoid the levy on profits, The Mirror said.

However in a Sunday night statement, 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 and decided to forgo certain deductions which would make us liable to pay £10 million in corporation tax this year and £10 million in 2014.

"We will pay the remaining five million later this year. We are also undertaking measures to make Starbucks profitable in the UK, such as relocating unprofitable stores, closing them where that is not possible and placing greater reliance on franchised and licensed stores."

Starbucks last year admitted it had not paid any corporation tax in Britain on sales worth £400 million between 2009 and 2012 and was able to pull it off by paying fees to other areas of its business — such as "royalty payments" for the use of the brand — which resulted in the company posting a series of losses, according to the Huffington Post.

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