Starbucks bows to pressure over UK tax

Starbucks: assesses UK tax arrangements
Starbucks: assesses UK tax arrangements

Starbucks is reassessing the amount of tax it pays in the UK, following major public backlash, saying it understands "we need to do more to maintain and further build public trust".

Revelations recently emerged that the coffee retailer has paid no corporation tax in the UK for the past three years, despite sales of £1.2bn during this period.

Corporation tax is only paid on profits and the company has made a loss during these years, but Starbucks has been accused of legitimately funnelling income to lower tax jurisdictions.

It reportedly paid £8.6m in corporation tax in the 14 years it has been trading in the UK.

Starbucks has said it is in talks with HM Revenue and Customs and the Treasury over how much tax it pays.

Starbucks said in a statement: "We have listened to feedback from our 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. The company has been in discussions with HMRC for some time and is also in talks with The Treasury."

It added that it has invested more than £200m in its UK business over the past 12 years and complied with all the tax laws in this country, but has "regretfully not been as profitable as we would have liked".

It plans to release further details later in the week.

Google and Amazon have also come under scrutiny over the low level of tax they pay in the UK, and Parliament’s Public Accounts Committee published its report today following a probe into the tax affairs of the three companies.

The report claimed the evidence provided was "unconvincing and in some cases evasive." It accuses all three of "immorally minimising their tax obligations".

It said that multinationals appear to avoid UK corporation tax by arranging their corporate structures, transfer payments and royalties to move money to lower tax jurisdictions overseas.

All three companies accepted being more transparent about their business practices, including paying their fair share of taxes, since it was becoming an increasingly important issue to their customers, said the report.

Last week, Marketing revealed that social media sentiment about Starbucks had plunged in the wake of the revelations about the level of corporation tax it pays.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Oasis #springasmile digital campaign gets people doing good deeds
Coca-Cola: 'Don't approach bloggers with a fait accompli'
Tesco CMO Matt Atkinson: 'It is so important not to stereotype mothers'
McDonald's gives Ronald a new look ahead of global 'Fun times' social media push
In pictures: BrewDog opens first craft beer shop BottleDog for 'beer aficionados'
Facebook ad revenue leaps $1bn as it invests in targeting
Malteser or Maltesers? Mars takes Hershey trademark dispute to court
Apple Q2 profits top $10bn as iPhone sales soar
Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Tom of Finland's 'homoerotic' drawings made into stamps
Toyota achieves the impossible by calming angry Roman drivers
YouTube reveals user habits to appeal to 'older' marketers