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World Economy
Apr 10, 2026

Starbucks UK Secures £13.7m Tax Credit Amidst Soaring Sales and Losses

AI Summary
Starbucks's UK retail arm received a £13.7m corporation tax credit despite increased sales and store openings. The credit comes after the company reported losses of £41.3m, largely due to £40m in royalty and licence fees paid to its parent company.

Starbucks's UK retail arm secured a significant £13.7m corporation tax credit last year, even as it reported a 6% increase in sales to £556.3m and added over 90 new stores, bringing its total to 1,304. The tax credit, which can be used to offset future tax bills, follows losses widening to £41.3m in the 12 months to September.

The company's financial performance was impacted by £40m in royalty and licence fees paid to its parent company, Starbucks Emea. These fees, which are paid to a UK-based entity that collects similar fees from across Europe, the Middle East, and Africa, significantly contributed to the losses.

Despite the losses, Starbucks UK's sales growth was driven by price increases, new loyalty schemes, and the introduction of “freshly baked in-store food”. The company also shifted its workforce towards full-time staff, reducing overall staff numbers by 244 to 5,352.

Critics, such as the Fair Tax Foundation, argue that this situation highlights a recurring issue where large corporations like Starbucks use complex financial structures to minimize their tax liabilities. “This all feels so very Groundhog Day,” said Paul Monaghan, chief executive of the Fair Tax Foundation. “As per a decade ago, 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.”

In response, a Starbucks spokesperson emphasized the company's commitment to paying all taxes due, stating that it “manages its global tax responsibilities in keeping with its mission and values.”

The company's financial challenges are expected to continue, with Starbucks UK citing a “challenging consumer environment” characterized by inflationary pressures, reduced discretionary spending, and increased competition. The company has received financial support from its parent group, including £30m in cash to keep the business afloat and a further £60m in February.