Setting the Record Straight on Starbucks UK Taxes and Profitability

Following reports about how Starbucks pays tax and reports profit in the UK, some of you may have been left with the wrong impression of Starbucks commitment to the UK.  

For 14 years, Starbucks has been honored to serve you. During that time we have grown to more than 750 stores and today we employ nearly 8,500 partners (employees) here.  With every visit to your country over the years, I have been personally touched by the warm reception I have received from our customers and partners, and I have the deepest respect for the millions of people with whom Starbucks connects directly and indirectly across the UK.

This is why I would like to address three misconceptions that have circulated about Starbucks during the past 10 days, and provide you with greater visibility into our business.

First, Starbucks has never avoided paying taxes in the UK. Let me be clear: Starbucks has always paid taxes in the UK despite recent suggestions to the contrary. In every country where we do business, Starbucks adheres to both the letter and spirit of the law regarding our business practices, and the UK is no exception. In fact, since we entered the UK market in 1998, we have consistently paid all taxes as required. Over the last three years alone, our company has paid more than 160 million pounds in various taxes, including National Insurance contributions, VAT and business rates. 

We have always worked closely with the appropriate tax authorities in the UK, U.S. and Netherlands – where our Europe, Middle East and Africa (EMEA) business is headquartered – to ensure mutual agreement and transparency regarding our tax obligations, including corporate income tax, which is based on taxable profits. Regrettably, Starbucks has only recorded a profit for UK tax purposes three times in the past 14 years (2006-2008). We will continue to respectfully engage in any dialogue HMRC officials would like to have with us. 

Secondly, Starbucks consistently adheres to the local accounting rules and tax laws everywhere we do business. As a U.S. based publicly traded corporation, Starbucks is obliged to follow U.S. securities law and Generally Accepted Accounting Principles (GAAP) when speaking with our shareholders.  U.S. accounting rules stipulate that our taxable income in regional markets, such as the UK, be calculated before accounting for the impact of intercompany license and interest payments.

At the same time, we are committed to respecting and complying with the tax laws of each of the 61 countries where we do business. In the UK, tax law requires that Starbucks and other companies calculate their taxable income after accounting for the impact of intercompany license and interest charges.  As a result of the differences in these reporting requirements, there have been past instances when we have communicated to shareholders that the UK has been profitable, albeit a small profit, while at the same time in the UK we had no taxable income to report, and thus no corporate income taxes to pay. Even if we excluded all intercompany license fees and interest payments, our UK margins in our most profitable year were in the mid-single digits, well below our targets and our most profitable markets. Our low profitability in the UK is completely unrelated to any kind of license fees or intercompany payments, it is unfortunately due to a number of historical operating and cost challenges, which we are working hard to change.

Thirdly, Starbucks European structure has no impact on our taxable profit in the UK. Despite what has been implied, Starbucks European structure has no impact on our taxable profit in the UK. In fact, the license fees we deduct for UK tax purposes are frequently negotiated and renegotiated between Starbucks and local country tax authorities. 

The license fees incurred across these markets are nearly the same (regardless of whether a licensee is company-owned or a third party) and do not affect regional differences in profitability. Additionally, when you combine the license fees and marketing contributions required by many other multinational retailers, Starbucks license fees are the same or less than our competitors.

As a final point of comparison regarding tax payments, it is worth mentioning that Starbucks global effective tax rate was 32.3% for the first nine months of our fiscal year 2012 compared to the 18.5% average for other large, U.S. multinational companies.

Starbucks remains committed to the UK market for the long term. We have always believed that to be successful we must do our best to strike a balance between profitability and social responsibility, and we will continue to strive to meet our own high ethical standards for how we care for our people, source our coffee, serve communities and operate in the countries where we do business.


Howard Schultz

chairman, president and chief executive officer 

Starbucks Coffee Company

comments (134)

Comment FAQ

    • antio82
    • 23/10/2012 15:53

    In 2007 your COO said that the UK unit's profits were funding Starbucks' expansion overseas. Your CFO added that the UK enjoyed profit margins of almost 15% - nearly £50m in profit.
    A year later, after filing a £26m loss, your told investors the business here was so successful he planned to apply the lessons in the US. Your CFO called the UK business "profitable" in 2009.

    Plus, if a business has been losing money for 14 years, then you close it or sack those responsible!

    So, who is lying?

      • simoneclarkson
      • 29/10/2012 04:23

      In reply to: antio82


      Please read the accounts and reports available to the public before posting such a comment. I don't understand why you expect other members of the public to explain the situation when you are quite capable of working this out for yourself if only you were not too lazy.


        • payurtax
        • 01/11/2012 17:29

        In reply to: simoneclarkson

        These comments were said to investors during regular reporting calls. I would be delighted to read either the transcripts made by Reuters or any provided by Starbucks.

        The whole issue is that Starbucks tells investors the UK makes profits but reports to the tax man that they make a loss.

        So Simon, pointing antio to reports just shows a fundamental lack of understanding of the issues.

        • antio82
        • 12/11/2012 09:51

        In reply to: simoneclarkson


        I'm not sure how your answer addresses any of the points I made?

        A. I wasn't addressing "members of the public" and
        B. You clearly have no idea what's happening, do you?

        Payurtax explained my point quite consicely, but if you have any more questions let me know.

        • ossi58
        • 04/12/2012 00:40

        In reply to: simoneclarkson


        Are you a Starbucks employee? if not they should love to have you as you seem to display similar symptoms. Starbucks says one thing re: profitability to the tax authorities and quite another in its reporting calls. You sign in as Simon but sign off as James.


      • donieG73
      • 05/11/2012 15:17

      In reply to: antio82

      Starbucks should use their very smart accountants to make sure that the maximum amount of tax is paid each year. You are making huge profits from people that, on the whole, pay ALL the tax they're supposed to. I like your coffe, comfy seats and tasty snacks. I have spent a lot of money in your stores in the last 3 years and my son loves your hot chocolate - we will never again spend a single penny in Starbucks. Greed greed greed, makes me so angry.

      • IanSedwell
      • 13/11/2012 12:09

      In reply to: antio82

      Hi Antonio... Starbucks' server has a mysterious fault that won't let me comment. May I piggy back?

      Dear Howard S

      1) We pay VAT on your coffee, you merely collect it.
      2) Business rates are allowable as a deduction on arriving at the profit on which Corporation Tax would be payable. You might pay it, but you claim it back. Disingenuous? I think so.
      3) Ditto Employers' National Insurance.

      Plus everything Antonio says.

      Pay your taxes!

        • humphjohn
        • 15/11/2012 02:44

        In reply to: IanSedwell

        Dear Mr. Schultz
        Any company that loses money every year bar one over a 15 year period is either incompetent or tax avoiding...or maybe money laundering. Obviously you are avoiding tax and myself and friends will boycott you until you pay your 15 years of overdue tax. If one of your stores goes up in flames do you call the Amsterdam Fire Service? Stupid question I know but that's where you pay your European taxes. Try calling the Geneva Police when your stores are invaded. Good luck with that!

      • Stoptaxlies
      • 14/11/2012 15:29

      In reply to: antio82

      I have to admit that I was going to boycott Starbucks before reading your correction of the wrong impression. However i realise that as a single taxpaying customer that would have very little effect. Now that I have fully understood the depth of your depravity and the height of your arrogance, I have decided that instead I will have to stop ALL of your customers and do everything possible, within both the letter and the spirit of the law of course, to bring down your whole immoral organisation.

      • triumph1000
      • 17/11/2012 07:16

      In reply to: antio82

      PAY YOU TAXES YOU THIEVING SCUM!!!!!! If they allow this rant to stay here, may I suggest you use a local, non starbucks, coffee shop, or use COSTA. At least they are British (Owned by Whitbread) AND they pay taxes. BOYCOTT starbucks at all costs.

      • klindsay1824
      • 23/11/2012 09:11

      In reply to: antio82

      Hopefully the British public will see to it that you really do make a loss by avoiding your stores nationwide. I'm certainly doing my bit to transfer Starbucks into Nobucks!

      • Hardworkingtaxpayer
      • 24/11/2012 15:13

      In reply to: antio82

    • antio82
    • 23/10/2012 15:54

    P.S.: "some of you may have been left with the wrong impression of Starbucks commitment to the UK"

    How patronising...

    • Simongoodley72
    • 24/10/2012 03:34

    "some of you may have been left with the wrong impression of Starbucks commitment to the UK ... Over the last three years alone, our company has paid more than 160 million pounds in various taxes, including National Insurance contributions, VAT and business rates".

    And you, Mr Schultz, may have the wrong impression of what VAT is. Starbucks doesn't pay VAT at all - your customers do. You just collect it. Just for the record, more than half of your £160m figure is VAT.

    • TinHerts
    • 24/10/2012 23:59

    Dear Mr Schultz,
    From reading your attempt at defending your company's position, it seems to me that you simply don't understand the anger you and your company have caused to the UK public and your customers who you seem to have have very little respect for. Despite not paying your fair share in the UK, your response above also comes with the aroma of pure arrogance. I now feel sick at the fact that I've given you my money for the last 8 years. As of today it's Costa Coffee all the way!!!

      • supportlocal
      • 13/11/2012 04:35

      In reply to: TinHerts

      At the risk of stating the obvious, why not support a local coffee house? Your money will stay local rather than being leeched out of the area.

        • cuppachar1
        • 13/11/2012 06:41

        In reply to: supportlocal

        I absolutely agree. We should support local businesses rather than multinationals who are only motivated by extracting the maximum profit from their businesses.

        In my experience their coffee is usually better and cheaper anyway.

    • TinHerts
    • 25/10/2012 00:41

    ....Mr Schultz, I think you're forgetting that you're not dealing with the average American here, the people of the UK are generally switched on and it's very difficult to pull the wool over our eyes... VAT is paid by your customers every time they make a purchase and National Insurance comes out of your employee's minimum wage salaries... It doesn't matter how you dress this up the only reason Starbucks doesn't pay UK taxes is out of GREED and nothing more! Sprinkle chocolate on that!

    • Williammclaughlan
    • 25/10/2012 05:12

    Stop the spin, your company is worming its way out of paying back a reasonable amount of tax back into the UK - at a time when it is vital to do so. It's disgusting. You have lost my custom; and while Starbucks continues its current financial practices I will not spend a penny on anything you produce.

    • stuyvpc
    • 25/10/2012 13:01

    I appreciate that you allow me to comment on your statement. Most people who have already commented have pointed out that VAT is a tax on the customer not on your company as well as the fact NI comes out of your employees salaryies. For the last 3 years a group of IT homeworkers have met twice weekly in Starbucks for a coffee and catch up. However as a group we have decided to move to Costa in future who at least pay some corporation tax on their profits in the same way we IT Contractors do.

    • jamescridland
    • 26/10/2012 07:58

    "For 14 years, Starbucks has been honored to serve you."
    It's spelt "honoured".

    Similarly, "Sorry for not paying corporation tax: we will endeavour to do so in future" is spelt as I've written it, and not the collection of excuses you give above.

    • MartinWoodstet
    • 28/10/2012 00:40

    There's a phrase in American politics: 'If you're explaining, you're losing'.

    With that, I'm off to enjoy a coffee at a rival coffee house that is probably price competitive as it balances actually paying corporate taxes with not having to pay for this kind of corporate BS.

    • jck_mls
    • 28/10/2012 12:01

    Considering the money I have spent at Starbucks in the UK, daily over the last 5 years, I would expect the normal proportion of that money to be paid back by Starbucks into the UK tax system, so that we can keep the country going, with things like road-building, policing, basic services, prisons etc. How else do Starbucks’ executives think these things are paid for? Oh yes, by us.

    • 1manirishguy
    • 31/10/2012 05:27

    I've been going to your stores for over 4 years now, on a daily basis.

    I would always get my morning coffee as I started work. I work for the NHS and tax that you should've paid would, in theory go to funding my wages.

    I was logging on here hoping against hope that you would have declared that you made a mistake and would change your current tax practices. I'm saddened that this isn't the case.

    I will continue to get my coffee elsewhere until something changes.

    • antjeryberg
    • 31/10/2012 06:03

    Having assessed the wider view from various outlets, I can only conclude that Starbuck's must continue their commitment to pay the applicable taxes in this country. The quality of their products and service are great, but being socially responsible, ethically and fiscally is important otherwise many people will get upset, and I know from my point of view that big companies tend to be scrutinised by all sides really harshly, leaving such companies with little room for error.

    • ggreaves
    • 31/10/2012 09:30

    The tone of the response came across as finger waving autocrat teacher and is an excellent example of how to get it wrong in spectacular style. "Setting the record straight" and "Firstly...Secondly...Thirdly"? If the intention was to annoy customers, mission accomplished. If that was not the case then this was an epic fail and a missed opportunity.

    • ggreaves
    • 01/11/2012 02:51

    Y11 Annual Report Pg 11: "We are increasingly dependent on the success of our international operations in order to achieve our growth targets." & "In particular, our Canada, Japan, UK, and China MBUs account for a significant portion of the net revenue and earnings of our international operations...". Do expand on paragraph 7 regarding the UK because the UK is grouped in Europe, Middle East, Africa and Russia.

    • matty9815
    • 01/11/2012 05:01

    For many years I have been a Starbucks fan, I like the coffee, the food and the atmosphere of your stores, so it was with some dismay that I heard of your 'creative accounting' on the news.
    I logged in today, and was again dismayed when I read your 'explanation'.
    Mr. Schultz, as a proud Englishman, I can advise you that we are not a nation of fools, and there's nothing we like more than a genuine apology when someone does wrong. You have not apologised, but excused, and this may...contd

      • matty9815
      • 01/11/2012 05:16

      In reply to: matty9815

      ...may be a costly error.
      As a proud Brit I know that when people do wrong, we like them to apologise. As a rule, we forgive and move on. You had an opportunity to do this. Fail.
      You surely, as 'President' 'CEO' and the various other lofty titles you append to your name, have sufficient financial acumen to know that we can ill afford to support people who don't pay their way. Now is the time to start paying your way, or risk losing out to Costa Coffee, a British company that pay what they owe.

        • MyOpinion1
        • 12/11/2012 15:41

        In reply to: matty9815

        Agree with you 100%... Only an idiot would lose an opportunity like this and the Starbucks CEO has again failed to put things right by a avoiding a simple apology. It seems to me the Starbucks thrives on greed and I can see this company is very quickly following the steps of other company heads who have watched their empires crumble beneath their feet (Ratners comes to mind). Needless to say I'm no longer a Starbucks customer.

    • payurtax
    • 01/11/2012 17:37

    Starbucks might have followed a broken tax code to the letter of the law, but but it failed the moral code. And Starbucks is the company that calls itself 'Ethical Local Global'.

    And how does the CEO defend itself? Say we pay VAT. Nonsense. The customers pay VAT and the VAT you pay on supplies is tax deductible.

    I will never spend a single penny at Starbucks ever.

    • payurtax
    • 01/11/2012 17:44

    You don't have to get you coffee at Starbucks any more. Go try out one of those local cafes, the decor won't have that McDonald's feel, the coffee will taste just as good, you'll have a better choice of reasonably priced treats and snacks. Oh, and you be supporting a local business that pays taxes that are used for things like teachers and doctors and police.

    • afeichtner
    • 04/11/2012 09:05

    I'm a bit in a limbo here. I am paying my tax in the UK and I would hope that everybody else (private or corporate) will do the same. Therefore, Starbucks: Slap on your wrist!
    However, looking how this country pampers it's tax evading banks, re-elects it's expenses-cheating politicians and prides itself in it's made-to-abuse social system, I find no wrong-doing in Starbucks' behaviour anymore...

    • qed007
    • 12/11/2012 00:32

    I came here to see whether any of the negative press was unjustified.

    Reading your comment made me sick. It was, frankly, insulting.

    Your VAT is paid by me. How dare you to claim my money as your tax contribution?

    National insurance is taken from your employee's wages. How dare you claim that as your tax contribution?

    This is the last you will hear of me. Ever.

    • dwjp84
    • 12/11/2012 02:09

    This statement is laughable. Just pay your taxes for goodness sake!
    Me never using starbucks again won't make much of a difference seeing as I find your tea and coffee pretty average, but I have certainly advised my friends that they should go for a coffee in a good, independent cafe in future and avoid you at all costs.

    • dwjp84
    • 12/11/2012 02:11

    *forgot to add that all important detail that I don't frequent you anyway, thus my boycotting you not making much of a difference.

    • surreyladyl
    • 12/11/2012 05:52

    Mr Schutz says the UK headquarters is in the Netherlands. That is a jurisdiction known to be used in order to channel profits to reduce a UK tax bill. Tax bills are viewed as just another cost to most large businesses and they will do whatever they can to reduce them. The means to do this may 'adhere to the local tax rules' in that no tax code is actually broken, but they are still morally repugnant. Face up Starbucks and come clean!

    • danjenk1
    • 12/11/2012 10:27

    You are a tax avoidance company and I look forward to the protests taking place nationwide on your stores in December. All customers should take their business to Costa which is a much more honest company!

    • HonestTaxPayingCitizen
    • 12/11/2012 11:38

    Really Mr Schultz, not only have you got the nerve to rip us off but then you go and insult us with these barefaced lies about paying VAT and national insurance!

    • MyOpinion1
    • 12/11/2012 13:40

    I don't think I've ever come across a business where the management team are so arrogant as to not recognise that what they're doing is wrong. Do you really think you're going to brush this one under the carpet and still expect to sell coffee in this country? If you're still claiming to be making a loss in the UK, then your tax avoidance actions will now certainly make sure your losses are greater than ever. I think it's time you turn off the lights, put the closed sign up and you all go home!

    • Talleke
    • 12/11/2012 13:42

    Everyone gets so worked up about this, Starbucks is not the only company that uses this clever accounting 'trick'. Apple has been doing it for years. Just because these companies are in big and in the public eye, everyone shakes their head and tuts disapprovingly. Keeping your overheads low and your income high is how you do business, this 'trick' is just a legal loophole that allows you to do that.
    So people nothing to see here, move along! I'm going to get myself a lovely Chai tea Latte :)

      • jaret139
      • 12/11/2012 15:52

      In reply to: Talleke

      You have lost my business also!

      • starbuckspayyourtaxes
      • 13/11/2012 21:42

      In reply to: Talleke

      Talleke if you have children I hope that you would teach them better reasoning than this. Just because lots of other companies also use accounting methods to legally avoid taxes does not make it right. I have am not aware if Apple is one of those that also do this but it is irrelevant. Keeping overheads low is part of business but taxes are a moral responsibility not just an overhead. Starbucks you claim to be "ethical" and "community focussed" do the right thing!

      • bartelbe
      • 03/12/2012 09:40

      In reply to: Talleke

      So its OK, because everyone else is doing it? To be fair, it is no worse than the justification above the line.

    • Meteorological
    • 13/11/2012 02:06

    I am astonished at your attitude and the idea that the above message may actually help, your company along with other multinationals operating in the UK uses every trick in the book to pay as little as possible in tax, but by trying to justify it are making your position somehow worse.
    If you cannot make money fairly then leave the UK market to companies who pay their full tax on their UK generated profits, if you can't make money in the UK fairly then you're a pretty badly run company IMHO.

    • fedayn
    • 13/11/2012 02:16

    You think they're bad in the UK? They've only paid €30k in income tax in Ireland in 5 years. Total scumbags.

      • 5_HATS
      • 13/11/2012 03:09

      In reply to: fedayn

      Looking forward to popping into one of your shops on 8 December 2012 to send a clear message for your company to PAY YOUR BLOODY TAX!!!

      If you make profit in this country you should pay CORPORATION TAX in thios country. This pays for all the wonderful services your 'partners' rely upon, like healthcare, transport, education, social welfare! This is a MORAL imperative and I will never be buying coffee from your company again until you start paying appropriate taxes for the size of your company!

        • johnnee
        • 14/11/2012 03:01

        In reply to: 5_HATS

        5_HATS sums it up perfectly for me. It may be legal but that doesn't stop it being morally repugnant. The bankers that put the world in the current mess acted legally but are quite rightly villified for their greedy behaviour; this is no different. So I'll be going local from now on but might return if Starbucks starts paying fair tax, although the VAT and NI point will always niggle, as does the patronising tone of the excuse.

    • bye-bye-Starbucks
    • 13/11/2012 03:09

    Gotta love it, huge corporations playing the kiss a** card when they get caught out. Come grovelling to us on your feet ay Schultz? Begging our trust?

    Bye bye Starbucks! Try turning this one around you tax avoiding scum! Yes there's more like you, we'll out them too. Wake up and smell the coffee.

    • The_Revenant
    • 13/11/2012 03:42

    "We have always believed that to be successful we must do our best to strike a balance between profitability and social responsibility..."

    So, Starbucks clearly, on the record, equates PAYING TAX to fulfilling a corporate social responsibility plan? I thought paying taxes was adhering to the law of the jurisdiction you're operating in? We all have to pay our taxes, or we end up in jail. We can't fob this off as a botched corporate social responsibility plan! Starbucks belongs in jail.

    • gar1975
    • 13/11/2012 03:50

    from the day i first heard about what taxes you avoid paying in the U.K i have stopped my daily visits to your stores & now use a local independent coffee house who actually pays tax on what they earn. i will not use a starbucks again until you do the same. shame on you!

      • joandonaby
      • 13/11/2012 04:04

      In reply to: gar1975

      Why should we be interested in whether a major tax dodger is 'committed to the UK'. People are going to drink the same amount whether its you or small cafes that pay their tax.
      Don't think that its only young people who are annoyed. I'm a retiree and have time to spend in coffee shops.
      It's not hard to boycott yours.

    • Benedictinus
    • 13/11/2012 04:01

    This is disingenuous, to put it politely. You say:

    "In the UK, tax law requires that Starbucks and other companies calculate their taxable income after accounting for the impact of intercompany license and interest charges."

    -which is true. What you're not saying, however, is that thes 'intercompany licences and interest charges' are precisely the mechanisms you have put in place in order to avoid paying taxes in the first place!

      • Benedictinus
      • 13/11/2012 04:08

      In reply to: Benedictinus

      The taxes I pay help pay for the roads by which you stock your stores, the schools that educate your employees so that they work well for you and the healthcare system that ensures they are fit to work. Why do I have to pay all these things to help you make a profit when you don't pay anything yourself?

    • muddeeeLIKEyourCOFFEE
    • 13/11/2012 04:13

    You are NOT committed to helping the UK when you AVOID paying tax... Quite frankly you take the preverbial urine out of all small businesses who actually DO pay their tax and provide a decent cup of coffee at a reasonable price unlike you..
    Looking forward to popping into one of your shops on 8 December 2012 to send a clear message for your company to PAY YOUR BLOODY TAX!!!
    Wont be the 1st time ive dont that either ...... jus sayin

    • C0ffeenupblood
    • 13/11/2012 04:28

    I for one, will be boycotting your stores from now on, as I only drink tea.

    • tinaxyz
    • 13/11/2012 04:53

    When there is possibility of paying no taxes, some people are inspired to become predators, and when predators don't pay taxes, they become bigger predators. who will protect the public from all these predators running around getting bigger and bigger. I will grow out of control. In fact that is what happened to the world's economy. At some point we will be bled dry.

    • tinaxyz
    • 13/11/2012 05:00

    When there is the PROMISE of paying no taxes, some OPPORTUNISTS are inspired to the idea. They begin a career as predators, and when these predators grow without paying taxes, they become bigger predators. At some point we will be bled dry. Because who will protect the public from all these predators running around multiplying exponentially ?

    • 13/11/2012 05:08

    Starbucks, you have been busted. All the excuses and frantic attempts to justify your shameless tax avoidance is only digging your grave deeper. Your tax avaoidance harms our communities. Shame on you

    • Seannaylor
    • 13/11/2012 05:55

    The issue is not whether or not what you are doing is legal but whether or not it is moral. Remember a small pressure group called UK Uncut started all this. They are directly responsible for getting tax dodging into the public domain. The great British Public are responsible for your meteoric rise in the UK, and we can take all that away again! It's easy to get a cup of coffee somewhere else, and your coffee ain't that great anyway.!

    • JxY666
    • 13/11/2012 05:58

    There it is folks, the way to get 20% off your coffee at Starbucks...

    "Over the last three years alone, our company has paid more than 160 million pounds in various taxes, including National Insurance contributions, VAT and business rates. ..." That is clearly an advert saying that they will pay your VAT contribution! As the customer is always right I think this could be a legal loophole we could exploit ourselves!

    • artbyandyc
    • 13/11/2012 06:36

    Starbucks told investors its European businesses made a $40 million profit in 2011, but accounts filed for its UK, German, and French units, which make up 90 percent of European revenues, showed a loss of $60 million. -

    If a local shop was making profits of£40,000 per year but was submitting tax accounts showing a loss of £60,000 a year I’m certain that HMRC would be investigating the business very quickly

    • artbyandyc
    • 13/11/2012 06:38

    this means that you are either lying to the tax authorities or you are lying to your investors.... this is not a misunderstanding on our behalf

    • AndrewJTaylor
    • 13/11/2012 06:50

    Just another company who doesn't care about it's customers. Pay your
    taxes and stop making excusses.

    • Taxcriminal1
    • 13/11/2012 09:30

    Tax-dodging criminals. Boycotted.

    • alweekes
    • 13/11/2012 11:14

    What a disingenuous bunch of claptrap "Starbucks adheres to both the letter and spirit of the law regarding our business practices"
    The law: maybe
    The spirit: NO
    You are avoiding tax, pure and simple, using mechanisms you've set up to do so. I honestly think you'd have got more respect with an honest answer of yes, we avoid paying tax through legal means, write to your MP.
    Whilst that would have been equally wrong, it may have earned an element of respect in place of the embarrassment above.

    • Paycorptaxlikeevery1else
    • 13/11/2012 11:22

    Count me in as another ex-customer who has now gone to a local, independent coffee house. Just in case you may have the wrong impression why this is Mr Schultz. Firstly, You have the audacity not to hold your hands up when you are caught out & admit that you do not pay corporation tax.

    Secondly, You patronise & under estimate the intelligence of the UK'spublic.

    Thirdly,Your lack of morality not paying corporation tax when you sell yourself as an ethical, responsible organization offends me

    • alweekes
    • 13/11/2012 12:40

    Interestingly Costa made 50 million in the UK last year and paid 15 million in tax.

    Are you telling us your organisation is so bad at what it does that it doesn't make a profit, when other chains are obviously successfully making money (which no one objects to) and paying their rightful tax?

    You really have to rethink that statement above for this reason: -

    “A happy customer tells one friend, an unhappy customer tells everybody.”

    • responsiblecoffeedrinker
    • 13/11/2012 13:02

    I stopped drinking coffee from your stores when I discovered your support of funding Israel, now I see that you don't pay proper taxes here, so where is this money going? Lining your pockets or funding more of what is happening right now over there? There is a reason why you have no stores in the Palestinian Territories.
    Shame on you all. Put something back into the community pay what you are due and start working ethically in EVERY way, can we please have proper FAIR TRADE where all sides are

    • alweekes
    • 13/11/2012 13:47

    Here's some figures: -

    Starbucks sales: £398 million last year, Corporation tax: £0

    Costa sales: £377 million last year, Corporation tax: £15 million

    You either have an incredibly poor business, or a very clever one. Which one would you like to admit to in public?

    We all know the real answer, if you weren't making a profit in the UK, after over a decade of trading, you would do what any other good business person would do and chop out the dead wood, you're clearly not a charity!

    • HonestTaxPayingCitizen
    • 13/11/2012 14:13

    "Starbucks has only recorded a profit for UK tax purposes three times in the past 14 years" Howard, if this is true, WHY ARE YOU STILL HERE? Honestly we can manage without you, thanks all the same.

      • Malcymoo
      • 13/11/2012 15:51

      In reply to: HonestTaxPayingCitizen

      Until you pay your taxes (including all the backdated stuff), I will not darken my milk with your coffee...

      • samuk1000
      • 14/11/2012 06:29

      In reply to: HonestTaxPayingCitizen

      For shareholders, why doesn't the board get the turnover of these managers going? As for hiring a litigation lawyer to write your letters to the public - you can see how much that was respected. This is where exciting entrepreneurial company --> lifeless dying corporation. Such is the cycle of business. Goodbye starbucks. Never did like paying £3 for a cup of luke-warm, sugary coffee to drink on junk shop furniture anyway.

    • benjcake
    • 13/11/2012 16:01

    Until you pay your taxes I will not spend another penny in your

    • JackCouvela
    • 13/11/2012 17:33

    Like many others I've created an account here in order to register my disgust not only at your blatant avoidance of corporation tax but this incredibly arrogant and insulting response.

    Not only are you responsible for putting countless independent cafes out of business, but you're stealing the proceeds by hiding them in other countries. I was a huge fan of your coffee and a regular customer until now, but it's Costa all the way from here on.

    • SomeOne22
    • 14/11/2012 11:01

    May I offer some advice. What you really need to do is start blaming the
    'system' and you were only doing what any sensible business would do.
    Also, the committees aren't the law, so lie away.

    Also, may I suggest you take part in the tax payer subsidised labour which
    is available to UK businesses. This way, you do not have to pay your staff,
    but get free labour paid for by the taxpayer under the guise of 'work
    experience.' After the designated minimum period, you just get rid of and go

    • The99percent
    • 14/11/2012 11:58

    This statement is avoiding the truth as fiercely as you avoid paying taxes. Do you really think we're so stupid as to believe that you have only made a profit in 3 out of 14 fourteen years and are happy to continue supporting "loss making" shops ? Everyone knows you're wilfully exploiting loopholes in tax law, yet you've the gall to post this statement. Your company enjoys the benefits of trading in the UK without paying its dues. Change or people will take you for cynical parasites

    • Fac051
    • 14/11/2012 13:29


    • Fac051
    • 14/11/2012 13:30

    • iand67
    • 14/11/2012 14:28

    If, year after year, you've been a loss make entity in the UK then why are you still here?

    I know lots of people like me who are not your normal protestors are appalled & have stopped going to your cafe's which must mean you'll be posting even bigger losses, won't it!

    • Alphamack
    • 14/11/2012 14:43

    I enjoy my short but precious time with my three young kids. We often end up in a coffee shop - comfy chairs, ambient music, hot chocolate, marshmallows, wifi, large chocolate coins, coffee lingo, coffee, and wonderful memories.

    I'm their dad and I take my parental responsibility seriously. When they ask me tough questions I try to be honest. This Saturday when they ask me why we're not going to Starbucks, I've prepared my answer...

    I'm now genuinely embarrassed to go into a Starbucks.

    • ElliH1
    • 15/11/2012 07:44

    As I am contributing VAT towards your product I have decided I won't be paying it any longer.... If you can avoid paying the correct amount of tax so can i

    • CharlesSchulz
    • 15/11/2012 09:41

    What a condescending lie, I mean, "explanation". Good riddance, Starbucks. Ethical only to profit maximisation and executive greed.

    • urcoffeeisshite
    • 15/11/2012 13:04

    I have never liked your coffee or your my community wall. I always thought that was patronising. Your "setting the record straight" has done just that. We now know exactly what sort of company and what sort of chairman, president, CEO and supreme commander of the universe you are

      • UKUncutt
      • 15/11/2012 15:09

      In reply to: urcoffeeisshite

      Look forward to seeing you all on 8th December - your shops will make great creches & Sure Start Centres. If you had not dodged your taxes all these years, perhaps there would have been enough money to keep these open & provide decent services?

    • UKUncutt
    • 15/11/2012 15:30

    If you are angry about Starbucks immoral & unethical behavour , go to for your nearest 8 December action against Starbucks tax dodging.

    • Paul_Harper
    • 15/11/2012 23:56

    The secret to decoding waffle like this is to read what's NOT there. You say you are required to discount inter-group interest and licence aments before calculating profit. Fair enough. What about the ridiculously high coffee prices you pay to your own Swiss business? They are neither a licence nor interest, but keep your UK operation "unprofitable" for tax purposes. As others have pointed out, VAT and employees NI are merely collected, not paid from your income. Now tell us the whole truth.

    • BobGear
    • 16/11/2012 11:39

    I will also go into Starbucks especially this weekend. I will of course expect to pay 20% less than the price on display, as you are telling me that you are pying my VAT.

    • richardpturner
    • 16/11/2012 12:42

    Dear Mr Shultz,
    Your claim regarding the persistent unprofitability of the UK operation, whilst knowing that over the same years many members of your senior team have bragged of the UK's profitability, shows a spectacular contempt for your UK customers' intelligence.

    Many people when they are sufficiently rich seek the respect of their peers, friends and family. I pity you for apparently having no such ambitions.

      • The_Real_H
      • 16/11/2012 14:16

      In reply to: richardpturner

      For 5-6 years now I have signed off expenses for staff. This invariably included on average £40 or so per day at Starbucks.

      Not any more.

      Written instructions were sent to all staff, and as of 1st November no expenses for Starbucks will be refunded. Result is that all but one staff concerned have now shifted their loyalty elsewhere.

      You really did forget the moral dimension, Mr Schultz.

        • MyOpinion1
        • 16/11/2012 15:47

        In reply to: The_Real_H

        My company has done exactly the same thing... No Starbucks coffee receipts are accepted for expense claims and a company wide email was sent explaining the tax fiddle Starbucks have developed. I truly believe the CEO and Accountant at this company must be the most stupid two clowns on the face of the earth... Pay Your Taxes!

        • churbleburble
        • 23/11/2012 09:10
    • MilesVR
    • 19/11/2012 13:56

    The majority of people in this country have little respect for a company so blatantly intent upon evasion of the lawful processes of taxation which we are almost all obliged to pay. I see the tax avoidance as a systematic act of dishonesty and deceit against HMRC and Starbucks should be prosecuted for this.

    I for one have no intention of contributing to Starbucks profitability ever again.

    • independentcoffeelover
    • 23/11/2012 06:31

    'Regrettably, Starbucks has only recorded a profit for UK tax purposes three times in the past 14 years (2006-2008)'

    That is because of an expansion program so aggressive that you have decimated the independent (tax paying) coffee shop market.

    VAT: Paid by the customer
    NI: Paid by the employee

    • ncsmn11
    • 23/11/2012 07:57

    I Run a UK Business and have had my share of "Tax Consultants" approach me about creative ways to avoid paying as much UK corporation tax.

    I've sat through these meeting and thought to myself "jeez I could actually get away with paying nearly no tax at all, and may even fly through my next Tax Audit"

    ~But... it didn't feel right and I knew it wasn't. I Pay what I consider to be a fair %.

    based on Turnover £3.1B over the years. My % = £90M NOT £8.6M. £8.6 is disgraceful.

    • Ameachem
    • 23/11/2012 08:00

    Me too, this is wrong on every level so my daily caffeine fixes will now be at Costas or Nero's until Starbucks decides to contribute it's fair share to the UK economy.

    Really hope that this can really gather momentum as the only way to get companies like Starbucks and Amazon to pay it's fair share is through direct action.

    • exstarbuckscoffeedrinker
    • 23/11/2012 08:29

    Your comments are arrogant Mr Schultz. Starbuck N’lands buy coffee beans then sell to Starbucks UK for a massive mark-up. It is impossible for UK to make a profit. You claim to be an ethical company. It’s a pity you could not show the same ethical standards with our HMRC. It’s not the wages of hard working staff which cause your lack of profit, its the Corporate fat cats who cream off the profits. With the boycotting you will have a genuine reason for not paying tax in the UK next year

    • theycallmesuperbad
    • 23/11/2012 09:04

    Starbucks may say "Starbucks adheres to both the letter and spirit of the law regarding our business practices, and the UK is no exception" and they are... but this doesn't excuse what they are doing.. at a time when the UK is struggling to pay back the massive public debt yet some companies Starbucks are making millions of pounds in profit yet not paying corporation tax... personally don't see how they deem this as morally right. I know their not the only ones but not shopping there anymore!

    • churbleburble
    • 23/11/2012 09:09

    I will not be spending my money at Starbucks any more, as they should pay the proper amount of Corporation Tax owed, and will encourage others to boycott them also.

    How they can say they made a £50m profit and then show a £26m loss is an accounting trick which has been exploited, and I hope that this loophole is quickly closed.

    Costa Coffee for me from now on!

    • corporationtax
    • 23/11/2012 10:30

    Paying VAT does not classify you as paying taxes. Since you supply standard rated goods, you have to charge VAT and this is borne entirely by the customer. So in effect all you are doing is collecting it from the customer and paying it to HMRC. Had the goods you sell been zero rated for example, you would not been paying VAT to HMRC!

    • georgewash
    • 23/11/2012 10:41

    Insipid coffee, boring shops and now massaging their tax bills in the good old UK..........not nice.........let's just take our business elsewhere!

    • rcunnington
    • 23/11/2012 12:02

    I must say, I am more frustrated by the pathetic response by Howard Schultz than about the original lax decisions... The British public are not stupid. I spend hundred of pounds a year in Starbucks, the quality of service I receive has been slowly falling. I drink frapachinos and they now vary so much in taste because the staff are over worked and rush drinks that i return one in 5 because they taste dreadful. SEE YOU ALL IN COSTA OR A LOCAL INDEPENDANT..

    • PayUpOrShipOut
    • 23/11/2012 12:29

    Ethical company my **** Although our pathetic government, who only see fit to line their own pockets at the expense of the sick and poor, have allowed this to continue unabated; now that your dirty washing has been hung out for all too see - you have a choice: pay your taxes as a responsible 'ethical' company or be shown for the money grabbing, thieving, liars you are. I for one will never set foot in your stores again and neither will any of my family unless you pay your fair share.

    • pbmpbmpbm
    • 23/11/2012 13:39

    Insulting. How stupid do you think we are?

    • pbmpbmpbm
    • 23/11/2012 13:46

    How do you expect to be accepted in a society when you seek to take (profits) but not give (even to pay basic taxes)?

    Coffee drinkers have consciences. My friends aand I are already starting to avoid you and those like you.

    • kaceyvc
    • 23/11/2012 13:48

    I cannot believe that you think Starbucks is an 'ethical' company???? I will never use Starbucks again. I would rather use Costa stores, who at least pay some corporation tax. Please do not try and justify your actions by saying you pay VAT and NI, these are NOT taxes.

    • IpayMyTax
    • 23/11/2012 15:16

    I've stopped buying coffee from Starbucks because of this issue.

    Like Starbucks, I am not "avoiding" drinking coffee. I'm just buying it elsewhere.
    It seems that Starbucks doesn't want my custom.

    • Solongsuckers
    • 23/11/2012 18:49

    I agree 100% with every comment above. You guys are a condescending bunch of thieves. You should be ASHAMED of yourselves. Lets hope you do "Wake up & smell the coffee".

    • AnilVaswani
    • 24/11/2012 09:04

    Dear Mr. Schultz,

    Please answer the following question in order to help me make my own
    decision about the fairness or otherwise of Starbucks.

    1. What is Starbucks' revenue from its UK operations in the last 5 years?
    2. How much tax has Starbucks tax has Starbucks paid to UK authorities
    over the last 5 years?

    Please exclude items like VAT or NI from the revenue / tax computation.
    I would like to understand how much tax you pay.

    • costasgreat
    • 26/11/2012 15:23

    Mr Schultz

    quote: Fool us once - shame on you, fool us twice, shame on us !

    I will never again visit your shops - the shame would be too much.

    Stay in the US and take your trade with you- if you are not making any profit why stay anyway?

    • mickydripping
    • 27/11/2012 10:26

    I, for one, and all of my family members will never visit Starbucks until they start paying their way in the UK.

    Change your accounting practices and I will consider returning.

    • mickydripping
    • 27/11/2012 10:30

    "Over the last three years alone, our company has paid more than 160 million pounds in various taxes, including National Insurance contributions, VAT and business rates."
    NONE of these are taxes on the profits you have made from us!!! They are all costs of doing business!!!!

    • mickydripping
    • 27/11/2012 10:31

    "As a final point of comparison regarding tax payments, it is worth mentioning that Starbucks global effective tax rate was 32.3% for the first nine months of our fiscal year 2012 compared to the 18.5% average for other large, U.S. multinational companies."
    Yes, BUT, None of these taxes have been paid in UK !!!!!!!!

    • barbarajtaylor
    • 28/11/2012 02:34

    Dear Howard,
    I'm writing as a loyal customer who is shocked at how your company (and many others) is legally avoiding paying tax in the UK. I know in the US, you are on the Forbes 'Best Company to Work For' list, you don't have to give benefits to your part time employees, yet you do. In the US, you are an example. So why can't you set an example internationally? We are suffering due to cuts to services that your taxes would save. You can be the hero, or you can lose your customers. Your choice.

    • TaxAvoidanceScam
    • 02/12/2012 12:34

    So, by acting in such a manner and running the risk of collapse
    (it's not impossible), not only are you raking in millions but you're jeopardising
    the employment of 8500 people?

    How very moral.

    You now have one less customer.....

    • taxedpatience
    • 02/12/2012 14:39

    I too will no longer be using Starbucks.

    • CoffeeTaxes
    • 02/12/2012 15:09

    I was simply going to boycott Starbucks, like many thousands of others. As Starbucks avoids paying its fair share of taxes, I calculate that this loss of revenue is hitting local authorities and they are having to close local amenities such as public toilets. So, I have now relented. I will in fact pay a visit to Starbucks if ever I feel the need to use the toilets. In fact I'm considering promoting a 'Have a Dump in Starbucks Day' in the very near future!

    • CoffeeTaxes
    • 02/12/2012 15:18

    Dear Mr Schultz... having read your pathetic statement, I am left wondering just HOW you ever managed to make it to be the head of a global company. I don't mean this to sound offensive, but your defence of your position is not exactly watertight is it?

    • Flossie9
    • 02/12/2012 16:19

    Like many other posts here I am surprised that what we can see at face value in our communities, busy efficient coffee shops, against the comments of Mr Scultz that these are not profitable. We can see the two elements do not resolve and there is a huge injustice going on: we must hope our government will address this but in the interrim a switch of custom to a company with an ethical approach to paying tax in the communities where they make their conduct their activities would seem prudent.

    • mobydikkkkkkk
    • 03/12/2012 00:53

    Yes, but one fundamental thing you omit is Why has Starbucks UK claimed not to have made a profit for the last 14 years. Is this not a creative lie. I suggest UK citizens stop buying coffee from you and go elsewhere until you admit to your corporate and human responsibilities.

    • bartelbe
    • 03/12/2012 09:35

    The above press release is a load of c**p. You have made no profits in this country, yet continue to trade here? You buy your coffee from Switzerland, without a single bean coming from that country?

    You got caught, now you have to pay. Here are your choices. Pay everything you owe us, and if you have any decency that will include everything you avoided in the past. Or sod off back to America.

    • bartelbe
    • 03/12/2012 09:38

    "In fact, since we entered the UK market in 1998, we have consistently paid all taxes as required. Over the last three years alone, our company has paid more than 160 million pounds in various taxes, including National Insurance contributions, VAT and business rates. "

    No those are paid by your employees, from their pay packets, unless you are generous enough to pay all your employees tax for them.

    What we are talking about is the tax that you as a company are avoiding. So pay up or leave.

    • Biggleslearnstofly
    • 04/12/2012 00:39

    In 2011 Howard Shultz was paid $16m. 2010, $21m. 2009 $14.9m.
    CFO has been paid $8m over three years. How much do you get Kris? Can we have some of their money as they've kept so much of ours. Seems an unusual situation for a company making a loss around the world to pay their top bosses so much. Seems to me this scam is happening further afield than just the uk. Let me guess. Similar set up across Europe? Which is why you've set up in Switzerland. Next to no tax paid there too.

    • tontojacks
    • 04/12/2012 02:36

    I find it amazing that you claim you pay taxes quoting national insurance for employees and business rates - SO DOES EVERY OTHER SMALL BUSINESS
    It is laughable that you say you have made no profits - you rent your name from yourselves, hype the price of your own beans and register elsewhere in the EU. Do you think we are all thick? You use our roads and infrasructure but do not contribute towards it. If you don't want to be part of our society GET OUT!

    • mackay8102
    • 05/12/2012 12:30

    I will show respect and I wish Howard S had when he "corrected" some misunderstandings and point out that the taxes you pay are mainly collected from clients and employees please just stand up and admit to your machinations of the UK tax system which allowed you to disclose "no profits" for so many years plus show your are contrite by paying not just corporation tax for this year but for the previous years. I await developments with interest but not anticipation.