Starbucks UK paid £8.1 million in corporation tax this year

Starbucks UK paid £8.1 million in corporation tax this year after reporting its largest ever profit in the region.

To put things in perspective, the amount Starbucks paid in corporation tax this year is almost as much as the total amount it contributed in its first 14 years of trading in the UK (between 1998 and 2012).

Starbucks posted pre-tax profits of £34.2 million in the 52 weeks to September 27, up from less than £2 million last year. It paid corporation tax at a rate of 24% – higher than the standard rate due to a one-off change in accounting practices.

The coffee chain giant reported an increase in UK like-for-like sales of 3.8%. Its profit margin of 6.9% was the highest since operating in the country.

Starbucks had previously managed to legally avoid paying UK taxes by transferring funds to its Dutch sister company in royalty payments. In 2011, for example, Starbucks generated sales of £398 million in the UK but paid no corporation tax.

But last year, after months of pressure from the British media and lawmakers, Starbucks European headquarters moved to Chiswick in London from Amsterdam. “This move will mean we pay more tax in the UK,” the company said at the time.

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

“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.”