Starbucks begins UK corporation tax repayments
Starbucks has been at the centre of the recent tax evasion scandal in Britain. Today the global coffee shop company announced that it has paid corporation tax in the UK for the first time in five years.
Having been named and shamed in the press and increasingly pressurised by both the British public and politicians, Starbucks agreed a repayment plan for the next two years. This commitment includes £20million of corporation tax that the company has failed to pay in the past five years. The first instalment of £5million has today been paid to the Exchequer.
The negligence of these huge financial taxation figures have been a source of controversy over the past year. Starbucks argue that as they made no profit from their chain of shops throughout Britain they were not required to pay corporation tax.
The coffee company claimed that they made a profit in just one year of the fifteen they have been operating in Britain. They also argued that they were a global high tax payer and were acting both ethically and legally.
In order to claw back some creditability a Starbucks spokesperson said that their “customers should not have to wait for us to become profitable before we started paying UK corporation tax.” The tax repayment plan was explained by the decision “to forgo certain deductions which would make us liable to pay £10 million in corporation tax this year and a further £10 million in 2014.”
Much of the company’s British profits are transferred to Starbucks’ operations in the Netherlands as dividends which means they are not liable to declare it.
