Mon, Feb 04, 2013 - Page 15 News List

Starbucks faces fight to restore UK reputation

AFP, LONDON

Starbucks has acknowledged paying no corporation tax for three years on sales worth £400 million owing to fees paid to other parts of its business. Executives insist its UK division is unprofitable.

Despite operating within the law, the firm has borne fierce criticism from lawmakers, including British Prime Minister David Cameron who told the World Economic Forum in Davos, Switzerland, last month that tax-avoiding companies must “wake up and smell the coffee.”

The swipe was ill-received by Starbucks, according to the Sunday Telegraph which claimed it threatened to pull £100 million of UK investment, though a source close to the company told reporters “no threat was made.”

“Starbucks agrees with the prime minister that all businesses should pay their fair share,” a Starbucks spokesman said.

“In the UK, we employ 9,000 people, contribute £300 million a year to the economy and are foregoing tax deductions that will make the Exchequer at least £20 million better off,” the spokesman added.

The firm says it remains “fully committed” to opening 300 new stores and creating 5,000 new jobs by 2016.

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