Starbucks Boss: 'We Pay Our Fair Share Of Tax'
The managing director of Starbucks UK has defended his company's tax arrangements which have seen it pay no corporation tax for the last three years.
Kris Engskov told Sky News the company had no plans to change its arrangements despite sales of £1.2bn in the UK.
He also insisted HM Revenue and Customs (HMRC) was happy with the amount of tax the coffee giant pays and is not investigating its accounts.
He said: "This idea, this suggestion that we don't pay tax in the UK is simply not true.
"Over the last three years we have paid over £160m in VAT, rates and national insurance.
"We don't maybe not pay as much as other companies have paid in corporate tax over the last few years.
"But I got to tell you, and it pains me to admit this at times, but we haven't done as well in the UK as we had hoped to over the last three years.
"We know that corporate taxes are directly related to profitability and it may seem like in the news this is all related to some big sophisticated tax structure but at the end of the day it's about local performance."
He added that Starbucks had only made a profit in the UK once in the 14 years it has been trading in the country.
In comparison, McDonald's paid a tax bill of more than £80m on £3.6bn of UK sales, while KFC incurred taxes of £36m on sales worth £1.1bn.
Starbucks, which has a market capitalisation of $40bn (£24.8bn), has a low UK tax rate because of a number of complicated corporate measures.
For example, its overseas operations have to pay a royalty fee - 6% of total sales - for the use of its "intellectual property", including its brand and business processes.
It also buys its coffee beans for its European divisions through a firm based in Lausanne in Switzerland, and the beans are shipped to Amsterdam to be roasted before they reach the UK.