COFFEE giant Starbucks has come under scrutiny after it emerged the US company reportedly paid just £8.6 million in corporation tax in 14 years of trading in Britain – and nothing in the past three years.
The firm, valued at £25 billion, has generated more than £3bn of sales in the UK since 1998 but has paid less than 1% in corporation tax.
Its nearest UK rival, Costa, owned by Whitbread, recorded sales of £377m last year, compared with Starbucks' £398m, but its tax bill was £15m (31% of profits).
Starbucks, which has more than 700 UK outlets, said it has paid its fair share of taxes in compliance with UK law and no authority had suggested otherwise.
The Seattle-based firm is the latest to face scrutiny for making a poor contribution to HM Revenue & Customs (HMRC) after Facebook and Google met similar criticism.
A probe by news agency Reuters discovered Starbucks was able to cut tax by paying fees to other parts of its global business, such as royalty payments.
This means Starbucks UK is effectively making a loss, so does not have to pay any corporation tax. As a result, it has not broken any law.
But tax campaigner and Labour MP Michael Meacher said Starbucks' practice was "extremely unfair... they are trying to play the taxman. It is disgraceful".
The most recent results, for 2011, show Starbucks UK recorded a £33m loss. It paid £26m to let the UK coffee houses use its labelling.
An HMRC spokesman said: "We make sure multinationals pay the right tax to the UK in accordance with UK tax law."
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