Starbucks says it paid £18.3m in tax last year
The company has faced years of criticism for the amount of tax it pays in the UK.
Starbucks’ UK-based European business, which has faced years of criticism for its tax affairs, said that its European, Middle Eastern and Asian business (EMEA) paid $23.6m (£18.3m) in tax on $230m of royalty payment earnings in the year to the end of September 2018.
Starbucks EMEA, which collects royalty income from 38 countries, said it paid “an effective tax rate of 23.7%”, which is above the UK’s corporate tax rate of 19%.
The UK subsidiary of the coffee group also reported revenues of £387m for 2018, up from £372m the year before. But due to a 10% rise in costs relating to renegotiating leases and closing stores, it fell to a loss before tax of £17.2m, from a £4.5m profit in 2017.
The group explained the loss was a result of “very challenging” conditions on the British high street.
“While not reflected in these results, we have already identified a clear strategy to respond to the ongoing pressures,” Starbucks EMEA president Martin Brok said.
New media partner announced
Starbucks also recently appointed Havas Group Media to handle its £2.5m UK media planning and buying account after a three-way pitch against M/SIX and incumbent Manning Gottlieb OMD.
Campaign reports that the result of the process, which was assisted by Creativebrief, comes a year after the company appointed Havas Helia as its first Europe-wide customer engagement agency.
Manning Gottlieb OMD has worked with Starbucks since 2000.
"We are incredibly grateful to Manning Gottlieb OMD for their years of service, passion and creativity, and wish them continued success," Reuben Arnold, vice-president of marketing and product at Starbucks EMEA, said.
