Starbucks faces multi-million-pound tax bill

05 December, 2012

Starbucks could fork out up to £10m in UK corporation tax for the current financial year, according to reports.

The company said it would be releasing a statement tomorrow (6 December), as a report by Sky News claimed Starbucks was close to a deal with the government, which could result in a UK corporation tax paymernt of between £5m and £10m for this financial year.

The news comes as Chancellor George Osborne announced the government’s decision to buckle down on tax avoidance as part of the Autumn Statement to the House of Commons this afternoon.

This includes companies such as the coffee shop business, which has been put under the spotlight for not paying anything in UK corporation tax during last year, and only paying £8.6m in taxes since 1998, despite reporting £3bn in UK sales during the period.

A spokesperson from Starbucks UK told The Guardian: “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 HM Revenue & Customs for some time and is also in talks with the Treasury. We will release more details tomorrow.”

The Chancellor gave further news on UK corporation tax, announcing the rate would be cut by a further 1% and will stand at 21% in April 2014.

He added: “The government wants the most competitive tax system in Britain than that of anyone else in the world. Tax loopholes will be closed with immediate effect and we will be investigating the abusive use of partnerships.”

It was announced that around £2bn is expected to be collected from tax avoidance measures.

A series of questions were aimed at David Cameron during the Prime Minister’s Questions regarding tax avoidance, to which he responded: “We have recovered around £4bn in the last four years and we are committed to doing all we can to make sure companies pay taxes properly. It is important people feel businesses meet their responsibilities. The HMRC knows there is more we can do.”

Starbucks has come under further fire this week regarding its business practices, after telling UK employees that cuts would be made to paid lunch breaks, sick leave and maternity benefits.

Members of staff were handed revised employment terms to sign, which included the removal of paid 30-minute lunch breaks. The company said it was a change it had not taken lightly and it needed to invest its money in the right benefits package now and in the future.





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