Starbucks pays its first £5m in corporation tax

Coffee chain Starbucks has paid corporation tax in the UK for the first time since 2008.

Starbucks has paid corporation tax in the UK for the first time since 2008

The firm’s cafés are a familiar sight on streets across the country but Starbucks told MPs last year it had made a loss for 14 of the 15 years it has operated in the UK, achieving just a small profit in 2006. But under pressure from politicians and the public the firm committed to pay £20m in corporation tax over two years and the Exchequer has now received the first £5m.

A Starbucks spokeswoman said: “We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10m in corporation tax this year and a further £10m in 2014. We have now paid £5m and will pay the remaining £5m later this year.

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“We are also undertaking measures to make Starbucks profitable in the UK, such as relocating unprofitable stores to more cost effective locations.”

Starbucks has paid corporation tax in the UK for the first time since 2008

In a showdown with the Commons Public Accounts Committee last year Starbucks insisted it was “an extremely high taxpayer” globally and acted “to an ethical” as well as a legal standard, despite declaring losses on its UK operation.

Its global chief financial officer Troy Alstead blamed an over-aggressive entry to the UK market which had left it with expensive properties that did not make money.