Starbucks agrees to pay more tax in the UK

Starbucks has said it will pay more tax in the UK as it moves its European headquarters from the Netherlands following a row over avoidance.

Starbucks is a brand in demand with British coffee drinkers. Picture: Getty

The coffee-shop chain was hit by a customer boycott two years ago in protest over its tax payments.

Now it plans to shift its regional head office from Amsterdam to London by the end of the year.

A “modest” number of senior executives will move to London so the firm will be “better able to oversee the UK market”, Starbucks said. The offices of its Middle East and Africa businesses will also be moved to the UK capital.

A statement said: “Today, our largest and fastest-growing European market is the UK. As the coffee industry has grown, the UK and London specifically has become one of the most competitive coffee markets in the world.

“In the UK alone, we plan to open over 100 retail stores this year, creating 1,000 new, permanent jobs. We expect continued growth in other European markets as well. This move will mean we pay more tax in the UK.”

Kris Engskov, Starbucks’ president of Europe, the Middle East and Asia, said: “Closer proximity to our biggest market will be critical to our success as we grow our business across Europe and the globe.”

Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry, said: “This very positive move by Starbucks greatly reinforces London as a key global centre for business and a highly desirable location for firms to base their
operations.

“Creating the right environment for businesses to flourish is essential to London competing at an international level and we are delighted that Starbucks has given the capital a ringing 
endorsement.”

Concern over the tax paid by firms such as Starbucks, Google and Amazon has drawn political attention to the question of how multi-billion-pound corporations structure their tax affairs.

The company told MPs in 2012 it had made a loss for 14 of the 15 years it had operated in the UK, achieving a small profit in 2006.

In a showdown with the Commons public accounts committee, 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.

Last year, the firm paid corporation tax in the UK for the first time since 2008, as it committed to pay £20 million over two years.