Starbucks ‘looks forward’ to paying more UK tax

A quarter of the chain’s 600 cafes in the UK are running at a loss, said finance chief Troy Alstead, blaming an expansion programme which had take out leases that “we will never make money on”, reports The Telegraph.

Speaking to the Financial Times he said: “I look forward to the day when we pay a lot more tax… we have had a long history, unfortunately and in the early days, of aggresive expansion. We did a little bit of a land grab and we made a lot of mistakes.”

The company came under criticism this week after it emerged that it had paid just £8.6m in corporation tax since 1998, despite making sales of £398m last year alone.

Part of the company’s operating costs involve a payment to the Starbucks head office. The company pays a 6pc royalty charge to the Starbucks regional headquarters in the Netherlands, which Mr Alstead said HMRC had “heavily scrutinised”.

The figure is considered very high in the industry, as Starbucks is charging its wholly-owned UK division more than what most companies charge franchises.

“I have been very angry in the last week not because there is scrutiny, but because it has been so misrepresented and innacurately reported,” he said. The cost of “operational expertise”, store design and intellectual property would be higher if they were not supplied by the parent company, he added.

The tax affairs of Starbucks has reportedly led to some customers boycotting Starbucks in favour of other coffee chains.

Michelle Gass, president of Europe, the Middle East and Africa for the coffee business, said that staff had been visiting stores to brief workers on how to respond to customers’ questions: “It’s not like ecery single customer coming in the door is asking about this, but for those that are, they are prepared with answers.”