Daily Mirror (Northern Ireland)
A latte less tax
UK Starbucks arm makes £162m profit.. but pays rate of just 2.8% Rooney is ‘to foot £6m tab as avoidance scheme fails’
COFFEE giant Starbucks has been slammed for paying just 2.8% tax on the profits raked in by its biggest Uk-based business last year.
The standard rate of corporation tax in the UK is 19%.
The company managed to slash its bill by claiming it had already paid tax on a bumper dividend from its Dutch arm.
Starbucks EMEA Ltd collects royalties from more than 3,000 directly owned and franchiseerun stores in 40 countries.
Of the £162million profit it made last year, £114million was a dividend from its Dutch business, where its roastery is based. Starbucks said it paid tax on the dividend in Holland, but refused to say how much. It had the affect of cutting its UK corporation tax bill to just £4.5million.
Shadow Chancellor John Mcdonnell said: “It is a scandal this Government is letting these big corporations get away with paying so little tax. When we get in power, that will change.” The European operation moved to the UK in 2014. Tax campaigners have criticised Starbucks for its “incredibly complex” corporate structure.
Paul Monaghan, chief executive of the Fair Tax Mark, said: “Its accounts raise more questions than they answer.”
The details emerged in accounts for Uk-based Starbucks businesses filed at Companies House.
They include Starbucks Coffee Company (UK) Ltd, which banked WAYNE Rooney is facing a multi-million-pound bill over a controversial tax avoidance scheme that has gone bust.
The footie star, who is settling into a new home in the US following his move to MLS side DC United, used film investment partnership Invicta 43 to shelter a total investment of around £12.5million.
Some of it was his own cash while millions were borrowed from Bank of Scotland.
The collapse of the scheme means he will have to pay the outstanding tax he owes and faces total losses thought to be in the region of £6million.
Rooney’s spokesman said: “Wayne has always paid all UK taxes in full and in accordance with the law of the time. He has also complied, as have thousands of other taxpayers, when retrospective rulings have been applied by HMRC.”
The Manchester United legend, 32, was among 225 Invicta investors who collectively bought the rights to two Hollywood films, Fred Claus and 10,000 BC.
Paperwork at Companies House confirms action has started to strike off the scheme. Rooney has yet to receive a formal tax demand as a result of the collapse.
HMRC said it could not comment but a spokesman added: “Tax avoidance doesn’t pay. Most schemes simply don’t work.” £372million in sales. Yet its corporation
bill halved to £3.3million after a sharp fall in profits. This was blamed on the cost of investment and “challenging” trading conditions.
However, it still managed to pay a £46million dividend last year to its US headquarters.
A spokeswoman said the payout was due to a shake-up of a financing arrangement with its parent company.
Starbucks claims it has simplified its tax structure in recent years, with sales from UK shops now booked here.
Other multinationals including Google and Amazon have been accused of using clever accounting to move profits abroad and slash their tax bills.