Starbucks to pay £10m in UK corporation tax in 2013

Starbucks, the world's biggest coffee chain, said it will pay £10 million pounds (€11.7 m) of UK corporation tax this year and in 2014 in response to criticism of its money-losing British business. The company has paid £5 million already and will pay the same amount later this year after forgoing unspecified tax deductions.

Starbucks, based in Seattle, will also pay £10 million of tax next year. The payments come amid criticism levied at the company by UK lawmakers and activist groups such as UK Uncut over complex accounting methods used to minimise its British tax burden. At this year’s World Economic Forum, UK Prime Minister David Cameron said companies need to “wake up and smell the coffee” on the issue, and tax avoidance was discussed at this month’s Group of Eight summit in Northern Ireland.

Politicians have also grilled executives at Google and Amazon. com. Starbucks said it will close or relocate unprofitable stores, and rely more on franchised or licensed stores rather than company-owned locations to become profitable in the UK. "Six months ago, we felt that our customers should not have to wait for us to become profitable before we started paying UK corporation tax," the company said in the statement. "We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10 million pounds in corporation tax this year and a further £10 million in 2014."

Starbucks, which has more than 700 stores in the UK and more than 18,000 worldwide, said in December that it would pay “a significant amount” of tax in the UK in 2013 and 2014. There has been no suggestion that Starbucks has broken any law.

Bloomberg