Starbucks’s retail arm gets £13.7m tax credit even as sales increase

Starbucks’s UK retail arm received a £13.7m corporation tax credit last year, even as its sales increased 6% and it added more than 90 stores.The credit, which can be used to offset future tax bills, comes after losses widened to £41.3m in the 12 months to the end of September – almost matching the £40m it paid in royalty and licence fees to its parent company.Starbucks said price increases, new loyalty schemes and the introduction of “freshly baked in-store food” had helped to increase sales to £556.3m, accounts filed at Companies House show.Paul Monaghan, the chief executive of the Fair Tax Foundation campaign group, said: “This all feels so very Groundhog Day. As per a decade ago, Starbucks-uk" class="entity-link entity-organization" data-entity-id="107663" data-entity-type="organization">Starbucks UK reports annual growth in income and store numbers, whilst at the same time declaring a loss due to the payment of hefty royalty fees to other Starbucks subsidiaries. The end result, no corporation tax is paid.”Last year’s tax credit comes after the UK retail business paid no corporation tax for 2024 as it dived to a £35m loss after paying £40m in royalty and licence fees to its parent.The royalty fees were paid to a UK-based entity, Starbucks-emea" class="entity-link entity-organization" data-entity-id="107666" data-entity-type="organization">Starbucks Emea, which collects similar fees from across Europe, the Middle East and Africa.That business paid out $27m (£20m) in corporation tax, the accounts show, but it was unclear how much of that would be paid in the UK, after it made a profit of $84.5m on revenues of $402m collected from several countries. The profit came after it paid out almost $65m under a “cost-sharing agreement” with its US parent and $17m in “support fees” to Starbucks-italy" class="entity-link entity-organization" data-entity-id="107667" data-entity-type="organization">Starbucks Italy.The group also paid a $207m dividend to the US parent, up $7m on a year before.A spokesperson for the Starbucks group said the company was committed to paying all its taxes, wherever they are due.“As a responsible business, we manage our global tax responsibilities in keeping with our mission and values,” it added. “Our approach to tax aims to align with the needs and long-term interests of our various stakeholders – including governments, shareholders, partners and the communities where we operate and source products.”Starbucks-uk" class="entity-link entity-organization" data-entity-id="107663" data-entity-type="organization">Starbucks UK opened 92 more outlets during the year, taking the total to 1,304, including those run by franchise partners. The openings included 25 company-run stores, taking that total to 398.However, it said it had cut overall staff numbers by 244 to 5,352 because it had shifted away from part-time workers towards full-time staff.The company said its losses had widened in 2025, citing a “challenging consumer environment characterised by inflationary pressures, reduced discretionary spending and increased competition”.It said prices of unroasted coffee had increased by more than 35% since August 2025 while wages and benefits costs had increased by 7.8% compared with 2024, including the government’s increase in employer national insurance contributions. The company also incurred a one-off cost associated with the closure of some underperforming stores.Starbucks-uk" class="entity-link entity-organization" data-entity-id="107663" data-entity-type="organization">Starbucks UK said its parent group had ploughed £30m of cash into the business to keep it afloat in the year to the end of September and a further £60m in February this year.It said the contribution was made to “strengthen the company’s liquidity position in the light of financial pressures experience in 2024 and 2025” as well as costs linked to its restructure.The group took out a £70m credit facility, which expires in December, and at its year-end in September had £166m of debts payable within a year, up from £144m a year before.