High street coffee chain Caffè Nero has come under widespread media criticism for paying no corporation tax in the last financial year, despite posting a profit of almost £23.6m.
The company said in its annual report that it paid no corporation tax, as its parent company (the Rome Pikco Group) made a pre-tax loss of £28.4m for the year and corporate tax affairs were “evaluated at this wider group level”.
When asked to explain, a spokesperson for the company said: “Caffè Nero pays all applicable taxes due in the UK.”
Caffè Nero has not paid corporation tax in the UK since 2008.
The company grew turnover in the UK and Ireland to £241m for the year to 31 May 2015, which was up from £222.4m a year earlier.
Adjusted ebitda increased by 7.8% “due to the continued expansion of stores, maturity of younger existing stores and careful cost management in the business”.
The company said that the 8.5% increase in revenue was driven by the opening of new stores and a like-for-like (LFL) sales growth of 2.3%. Pre-tax profits grew slightly to £23.6m from about £23.5m.
Caffè Nero opened 36 stores and closed five during the year under review. At the year end, it had 571 stores in the UK and Ireland and said it planned to open approximately 40 stores next year.
Last month, it was reported that Starbucks, Caffé Nero and Costa pastries and sandwiches contain too much salt, according to research for The Telegraph.