Starbucks UK Receives £13.7m Tax Credit Despite Sales Growth and Widening Losses
Starbucks’s UK retail division secured a £13.7 million corporation tax credit for the previous year, despite reporting a 6% increase in sales to £556.3 million and expanding its network by 92 stores. The tax credit coincides with widened annual losses of £41.3 million, a figure nearly equivalent to the £40 million paid in royalty and license fees to its parent company. Critics, including the Fair Tax Foundation, argue that the company utilizes internal fee structures to avoid paying UK corporation tax while maintaining profitability at the group level. Starbucks attributes the losses to inflationary pressures, rising costs for unroasted coffee and wages, and increased competition. To support liquidity amidst these financial pressures, the US parent company injected £90 million in cash into the UK business. The retailer also adjusted its workforce, reducing staff numbers by shifting from part-time to full-time roles. This development highlights ongoing scrutiny regarding multinational corporate tax strategies in the UK, as the company continues to expand its physical presence while managing significant debt and operational costs.
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Starbucks UK Receives £13.7m Tax Credit Despite Sales Growth and Widening Losses
Starbucks’s UK retail division secured a £13.7 million corporation tax credit for the previous year, despite reporting a 6% increase in sales to £556.3 million and expanding its network by 92 stores. The tax credit coincides with widened annual losses of £41.3 million, a figure nearly equivalent to the £40 million paid in royalty and license fees to its parent company. Critics, including the Fair Tax Foundation, argue that the company utilizes internal fee structures to avoid paying UK corporation tax while maintaining profitability at the group level. Starbucks attributes the losses to inflationary pressures, rising costs for unroasted coffee and wages, and increased competition. To support liquidity amidst these financial pressures, the US parent company injected £90 million in cash into the UK business. The retailer also adjusted its workforce, reducing staff numbers by shifting from part-time to full-time roles. This development highlights ongoing scrutiny regarding multinational corporate tax strategies in the UK, as the company continues to expand its physical presence while managing significant debt and operational costs.
The Guardian