London Daily

Focus on the big picture.
Friday, Jul 04, 2025

Starbucks pays just £5m UK corporation tax on £95m gross profit

Starbucks pays just £5m UK corporation tax on £95m gross profit

‘Administrative expenses’ of £78m, including royalties, helped bring taxable profits down to £13m last year
Starbucks paid just £5.4m in UK corporation tax last year despite making a gross profit of £95m.

The company, which has faced years of heated criticism for paying very little tax in the UK, paid out £26.5m in royalty payments, almost five times as much the UK tax it paid, according to accounts filed at Companies House.

The royalty payments helped Starbucks, which is run by the billionaire Howard Schultz, make a global profit of $4.9bn (£3.7bn) in the same period.

The UK division collected sales of £328m from its 1,000 UK stores in the year to 3 October 2021, up from £243m in the previous year when shops were temporarily closed during the pandemic lockdown.

Starbucks Coffee Company (UK) made a £95.1m “gross profit” for the year, but after swallowing “administrative expenses” of £78m, its pre-tax profits were reduced to £13.3m, on which it paid £5.4m tax. A year earlier the company received tax credits of £4.4m after recording a pre-tax loss of £40.9m.

Starbucks said administrative costs included occupancy costs such as business rates, service fees, maintenance and utilities for stores and central costs required to run the UK business, including IT, marketing, and head office costs.

The UK arm of Starbucks has made cumulative losses after tax of more than £100m between 2010 and 2021, according to a Guardian analysis of its accounts. It reported a profit in only five out of 12 years, but tax experts say it is unclear whether they are a true reflection of the business.

Paul Monaghan, the chief executive of the Fair Tax Foundation, said: “Starbucks’ main UK subsidiary maintained its tradition of paying little corporation tax in the UK, and this was once again down to the payment of hefty royalty and licensing fees to entities further up the corporate group.

“The numbers now have a certain predictability.”

In 2012, it was revealed that Starbucks had paid just £8.6m in taxes on £3bn in UK sales since 1998, when it launched its first UK coffee shop.

The company declined to comment on the royalty payments or the reasons for its very low pre-tax profits in the UK.

Separate accounts show that Starbucks’ UK-based European business paid just $13m in tax last year, while paying the coffee giant’s parent company in Seattle a $164m dividend.

Starbucks Europe, the Middle East and Africa (EMEA) collected royalty payments of $237m in the year to 3 October. It made a pre-tax profit of $190m, and paid $13.1m in tax.

The company said the tax payment was low because “this dividend income has already been taxed in other jurisdictions before it is booked for accounting purposes as a profit in Starbucks EMEA Limited. As the income has been taxed already, it is exempt from further UK corporation tax charges.”

Starbucks EMEA, which collects royalties from 43 countries including the UK, has built up shareholder funds to more than $2tn.

Starbucks Corporation, the US parent company, made an “operating income” profit of $4.87bn in the year to 3 October 2021, on sales of $29bn.

Shultz, who transformed Starbucks from an 11-store Seattle chain he took over in 1986 into a global coffee empire, earlier this month announced that he was returning as interim chief executive. Shultz, who has built up an estimated $4bn fortune, is rejoining for his third stint as chief executive after the retirement of Kevin Johnson.
Newsletter

Related Articles

0:00
0:00
Close
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
×