Starbucks coffee chain pays £8 million in tax to UK government

Coffee house chain Starbucks UK has achieved a significant rise in its pre-tax profits in the year to September 2015 and has paid more than GBP8m in tax in the past 12 months, the BBC reported on Tuesday.

Following a public outcry in 2012 at how little tax the UK arm of Starbucks paid in its 14 years of trading in the UK, the coffee chain had said would pay significantly more in corporation tax.

Despite recording sales of almost GBP400m in 2011 and previous sales worth billions of pounds, the company had only paid a total GBP8.6m in tax to the UK government before 2012.

The company saw its pre-tax profits increase to GBP34.2m in the twelve months ending 27 September 2105, in comparison to pre-tax profits of less than GBP2m in the year before.

Starbucks has reportedly  invested heavily in turning its business around which has resulted in its sales growing by 3.8%, according to the BBC, which added that a company spokesperson had stated that the company has focused on renegotiating leases, closing unprofitable stores, opening more franchise stores and cutting costs across the business. The chain also transferred 74 stores to franchisees, as well as opening 29 new franchised stores.

In a written statement, the company’s European boss Kris Engskov said: “Thanks to the commitment and hard work of our partners (employees), Starbucks has delivered its largest ever after-tax profit since opening in the UK in 1998.”

Engskov added: “Before and after-tax profits are both up by more than GBP30m as we have invested in the store experience while managing our costs.

“As a result, our corporation tax payments also increased.”