Nero’s ZERO corporation tax – despite £2bn sales

Coffee chain Caffe Nero has not paid a penny of corporation tax for ten years, it has emerged.

Despite racking up sales of around £2billion between 2007 and 2017, the High Street chain has paid no corporation tax in the UK over this period.

Last night campaigners called for customers to boycott Caffe Nero and instead give their money to local coffee shops. It follows outrage over revelations that giant firms including Starbucks, Google and Amazon have managed to exploit the tax system to pay the bare minimum.

The latest financial accounts reveal Italian Coffee Holdings generated £288million from sales in the UK and Ireland in the year to May 31, 2017. The London-based firm also racked up £26million in profit.

Corporation tax is charged at 19 per cent of a firm’s profits, meaning Caffe Nero would normally be liable to pay around £5million

But it managed to avoid this because parent company Caffe Nero Group Holdings made a £25.5million loss due to interest payments on the £300million it owes to banks.

The revelation has incensed MPs, with one warning that such practices by big firms are helping to ‘kill off the High Street’, as they give an unfair advantage over family-run outlets. The Commons Treasury committee plans to launch a six month inquiry into tax avoidance by big business.

Labour MP Dame Margaret Hodge, chairman of the Parliamentary group on responsible tax, said: ‘The iniquitous activities of Caffè Nero are killing off neighbourhood British cafes which ... pay their fair share.

‘Caffe Nero should be ashamed that it does not make a fair contribution to the public services ... that enable it to make its profits.’

Professor Richard Murphy, director of Tax Research UK, urged Caffe Nero’s customers to support local coffee shops instead if they disapprove. ‘Companies will continue to take advantage of UK tax system until consumers make it clear it is unacceptable,’ he said.

Caffe Nero has 637 outlets across Britain. In its latest financial accounts, it boasts of its rapid growth and aggressive expansion plans after another successful year.

But Caffe Nero said Caffe Nero Group Holdings ‘ generated a loss before tax of £25.5million and therefore no entity within Caffè Nero Group Holdings was due to pay tax for the year’.

A spokesman said the firm ‘ has always, and will continue to pay, all applicable taxes due in the UK’. There is no suggestion Caffe Nero has done anything illegal. It paid more than £61million last year in NI, business rates and VAT.