December 18 ,2015 | by Claire Payne

HMRC gets £8.1m in UK corporation tax from Starbucks

UK corporation tax

The UK arm of multinational coffee chain Starbucks has handed over £8.1m in corporation tax to the Treasury in 2015 after changing the complex tax structures that had seen it pay a similar sum in total over its first 14 years of operations in the UK.

The company bowed to pressure and relocated its European HQ to the UK after research in 2012 had revealed that the multinational had only paid £8.6m in tax on £3bn in sales since 1998.

Increased profits

Pre-tax profits for the company rose to £34.2m in the year to 27 September, with the previous year’s number recorded at less than £2m. There was a corresponding rise in sales of 3.8%.

Starbucks president for Europe the Middle East and Africa, Kris Engskov, said: "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.

“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.”

HQ move

The new figures relate to the first tax payment made by the group since it moved its headquarters to the UK in April of last year.

The move also reflects the fact that over half of Starbucks’ European outlets are located in the UK.

In fact, last year's corporation tax figure for the company was actually higher, but this included a £20m tax deal the company agreed with HMRC, part of which was a ‘voluntary contribution’ to pay more tax. 

Claire Payne

Claire Payne is a journalism graduate and News Writer for LSBF. She writes about SMEs, education and careers, entrepreneurship, women in business, and sustainability.

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