Starbucks serves up £8m in UK corporation tax after record results

Kasmira Jefford
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Starbucks has recorded its second ever year of UK profit (Source: Getty)

Starbucks served up £8m in corporation tax to the UK last year after brewing up £34.2m in pre-tax profits.

The Seattle-based coffee chain has faced fierce criticism for paying minimal corporation tax since launching in Britain in 1998, after claiming to have never made a profit until last year.

In its latest set of results, Starbucks said profits leapt by £32.2m in the year to 27 September compared with £2m in 2014, when it swung into the black for the first time. It made a £20.5m loss from the prior year.

“Thanks to the commitment and hard work of our employees Starbucks has delivered its largest ever after-tax profit since opening in the UK in 1998,” Kris Engskov, Starbucks EMEA president, said.

“Before and after tax profits are both up by more than £30m as we have invested in the store experience while managing our costs. As a result our corporation tax payments also increased.

The £8.1m corporation tax payment was lower than last year’s payment of £11.4m, which including the last installment of the £20m voluntary contribution Starbucks agreed to pay 2012 to win back customers following the revelations over its tax arrangements.

Starbucks said like-for-like sales grew by 3.8 per cent after “ reshaping the UK portfolio to build a leaner and more efficient business”.

It closed 17 stores and handed over 74 to franchisees in the period but also opened 54 franchised, licensed or company owned stores in the period, creating over 800 new jobs.

“The strategy to offer great customer service, provide new and exciting experiences for customers in our stores, and improve our operating model is delivering,” Engskov said.

In September, Starbucks pledged to pay the National Living Wage to all of its 7,000-plus workers in the UK and even offer them interest-free loans to help them with housing costs.

The company claims that the so-called Home Sweet Loan scheme, developed by Shelter, is the first of its kind to be launched by a private company in the UK.

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