Starbucks paid just £5.4 million in UK corporation tax last year – despite making a gross profit of £95 million.
The company, which has long been criticised for paying too little tax in the country, paid out £26.5 million in royalty payments, almost five times the UK tax it paid, according to accounts filed at Companies House.
In the same period, Starbucks – which is run by billionaire Howard Schultz – made a global profit of $4.9 billion (£3.7 billion).
The UK division of the coffee behemoth collected sales of £328 million from its 1,000 UK shoes in the year up to 3 October 2021 – up from £243 million the year before, when shops were temporarily closed during lockdown.
‘Certain predictability’
According to The Guardian, Starbucks Coffee Company (UK) mad a £95.1 million “gross profit” for the year, but after taking into account “administrative expenses” of £78 million, its pre-tax profits were reduced to £13.3 million – on which it paid £5.4 million tax.
Paul Monaghan, the chief executive of the Fair Tax Foundation, told the newspaper: “Starbucks’ main UK subsidiary maintained its tradition of paying little corporation tax in the UK, and this was once again down to the payment of hefty royalty and licensing fees to entities further up the corporate group.
“The numbers now have a certain predictability.”
In 2012, it emerged that Starbucks had paid just £8.6 million in taxes on £3 billion in UK sales since 1998, when it launched its first UK branch.
Billion dollar profits
Separate accounts show that the company’s UK-based European business paid just $13 million in tax last year, while handing its Seattle-based parent company a $164 million dividend.
Starbucks said the tax payment was low because “this dividend income has already been taxed in other jurisdictions before it is booked for accounting purposes as a profit in Starbucks EMEA Limited. As the income has been taxed already, it is exempt from further UK corporation tax charges.”
Starbucks Corporation, the US parent company, made an “operating income” profit of $4.87 billion in the year up to October 2021, on sales of $29 billion.
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