Starbucks Denies Making Money In Tax Grilling

Written By Unknown on Senin, 12 November 2012 | 23.38

A top Starbucks executive has told MPs that the coffee giant has continually made a loss in the UK - but was told his claim "doesn't ring true".

Mr Alstead, global chief financial officer at the company, denied lying to shareholders over the US chain's accounts when he appeared before the Commons Public Accounts Committee (PAC).

The PAC is questioning representatives of Starbucks, Amazon and Google about the amount of tax they pay in the UK amid mounting concern about tax avoidance by big international firms.

When grilled by Labour MP Margaret Hodge, head of the PAC, Mr Alstead said Starbucks had only made a profit once in the 15 years it has been doing business in the UK.

"I assure you we are not making money," he told the committee.

"It's very unfortunate. We're not at all pleased about our financial performance here. It's fundamentally true."

Ms Hodge replied: "You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true."

Starbucks reportedly paid just £8.6m in corporation tax in 14 years of trading in Britain.

It was also revealed it paid no corporation tax for the past three years, despite sales of £1.2bn in the UK.

But Ms Hodge questioned how that could happen when statements the committee had seen showed a former chief financial operator said in 2007 the division had an operating profit rate of 15%.

Mr Alstead denied knowledge of the statements and insisted the first profit Starbucks made was £6 million in 2006.

Ms Hodge questioned why the company had filed millions in losses then promoted the head of the UK business, Cliff Burrows, to take over the US operation.

She said also it did not "ring true" that the man in charge of an operation that was running such an unsuccessful division would be promoted.

Earlier, the coffee giant's UK managing director, Kris Engskov, told Sky News last month the firm had no plans to change its tax arrangements.

Matt Brittin, the chief executive of Google UK, and Andrew Cecil, Amazon's director of public policy, are also giving evidence to the committee.

Google's UK unit paid just £6m to the Treasury in 2011 on revenue of £395m, according to The Daily Telegraph.

Earlier in the year, The Guardian reported Amazon - Britain's largest online retailer - generated UK sales over the past three years of between £7.6bn and £10.3bn, but paid virtually no corporation tax.

The three firms are among several which have had their tax affairs put under the spotlight recently.


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