Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Starbucks succumbs to tax avoidance pressure

Starbucks succumbs to tax avoidance pressure

Starbucks has agreed to review its accounting practices amid controversy over its UK tax affairs.

The coffee giant has accepted it ‘needs to do more’ as the public and politicians described the £25 billion firm’s avoidance of tax as ‘immoral’ and ‘outrageous’.

According to reports, the discussions centre on the firm’s 4.7% ‘royalty fee’ to a sister company in Holland for the right to use the Starbucks brand and recipe. This effectively enables the company to benefit from the more favourable tax regime in Holland and is estimated to have cut its tax bill by around £5 million last year.

Since it launched in the UK 14 years ago, Starbucks, which now has more than 700 outlets, has paid £8.6 million in corporation tax despite registering over £3 billion in sales.

A spokesperson for Starbucks said on Sunday: 'Starbucks is committed to the UK for the long term. [We have] complied with all the tax laws in this country but have regretfully not been as profitable as we would have liked.

‘We have listened to feedback from customers and employees, and understand that to maintain and further build public trust we need to do more. As part of this, we are looking at our tax approach in the UK.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter