Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of 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 & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter