Starbucks to Pay £20M More Tax in UK Over 2 Years

British consumers were outraged earlier this year when reports revealed that Starbucks, despite operating hundreds of stores and generating billions in revenue, had paid minimal UK corporate income tax over more than a decade. Public anger grew as details emerged about the coffee giant’s financial practices — leading to protests and calls for a boycott.

In response, Starbucks has now committed to paying an additional £20 million in UK taxes over the next two years, regardless of profit levels. This move comes after pressure from media and customers demanding greater corporate accountability.

How Much Has Starbucks Really Paid in UK Tax?

Starbucks entered the UK market in 1998 and has since expanded to 735 stores, with cumulative turnover exceeding £3 billion. However, over 14 years, the company paid just £8.6 million in UK corporate income tax. In the most recent three-year period, despite reporting £1.2 billion in turnover, Starbucks paid zero corporate tax in the UK.

Why Did Public Outcry Force a Change?

The revelations, reported by UK media in October, sparked widespread anger. Many customers felt betrayed by a brand they frequented, leading to organized boycotts and negative sentiment online. Starbucks UK Managing Director Kris Engskov acknowledged the company was “very shocked” by the public’s reaction and described the backlash as indicative of broader consumer expectations during tough economic times.

What Is Starbucks Actually Committing To?

Kris Engskov stated that Starbucks UK will pay more tax than in previous years for the next two years, irrespective of profitability. He clarified that Starbucks has always followed UK tax laws, but conceded that “customers clearly want us to do more” during periods of economic difficulty. This voluntary increase is not an admission of illegal activity, but rather a response to reputational damage and consumer demand for ethical corporate behaviour.

What About Other Multinationals?

Google, another multinational facing UK tax avoidance allegations, maintained its position, stating that its current tax arrangements fully comply with UK law and that it has no plans to change them. Meanwhile, Starbucks’ voluntary tax pledge stands in contrast to such stances, highlighting differing approaches among global firms under public scrutiny.

Frequently Asked Questions

How much extra tax is Starbucks paying in the UK?

Starbucks has pledged to pay an additional £20 million in UK corporate tax over the next two years. This commitment is independent of whether the company is profitable during that period.

Why did Starbucks pay so little tax in the UK?

Over 14 years, Starbucks paid only £8.6 million in UK corporate income tax despite operating 735 stores and generating more than £3 billion in revenue. In the last three years, it reported £1.2 billion in turnover but paid zero corporate tax.

Did Starbucks admit to tax evasion?

No. Starbucks stated it has always paid taxes legally in the UK, but acknowledged that customers expect more during economically difficult times, prompting the voluntary tax increase.

How did the public react to Starbucks’ tax practices?

The British public reacted with anger, leading to online boycotts and widespread criticism. Many customers felt misled by a brand they regularly patronized.

What did Starbucks UK’s managing director say?

Kris Engskov said the company was “very shocked” by the backlash and recognised the need to rebuild trust. He confirmed Starbucks will pay more tax over the next two years, regardless of profit.

Is Google also avoiding UK tax?

Google stated its UK tax practices comply with local laws and that it has no intention of changing them, unlike Starbucks which chose to voluntarily increase its tax contribution.