The UK division of Starbucks reported a corporation tax credit of £13.7 million last year, despite experiencing a 6% increase in sales and the addition of over 90 new locations. This tax credit can be applied against future tax obligations, following a significant rise in losses, which reached £41.3 million for the year ending September, nearly equivalent to the £40 million spent on royalty and licensing fees to its parent company.
According to documents submitted to Companies House, Starbucks attributed its sales growth, which totaled £556.3 million, to various factors, including price hikes, new loyalty programs, and the launch of freshly baked items available in-store.
Paul Monaghan, the chief executive of the Fair Tax Foundation, expressed concern over the situation, calling it reminiscent of prior years. He remarked, “This scenario feels like déjà vu. Once again, Starbucks UK reports growth in revenue and store count while simultaneously declaring a loss due to substantial royalty payments to its parent company, resulting in no corporation tax being paid.”
Last year’s tax credit follows a similar pattern, as the UK retail arm did not pay any corporation tax for 2024 and reported a £35 million loss after disbursing £40 million in royalty and licensing fees to its parent organization.
The royalty payments were directed to a UK-based entity, Starbucks EMEA, which collects similar fees from various regions including Europe, the Middle East, and Africa. The EMEA entity reported $27 million (£20 million) in corporation tax; however, the specific amount attributable to the UK remains unclear, given its profit of $84.5 million on revenues totaling $402 million from multiple nations. This profit was achieved after accounting for nearly $65 million paid under a cost-sharing agreement with its US parent and $17 million in support fees to Starbucks Italy.
Additionally, the group distributed a dividend of $207 million to its US parent, an increase of $7 million from the previous year.
A spokesperson for Starbucks emphasized the company’s commitment to fulfilling its tax obligations globally, stating, “As a responsible business, we manage our global tax responsibilities in alignment with our mission and values. Our tax strategy is designed to meet the needs and long-term interests of our diverse stakeholders, including governments, shareholders, partners, and the communities in which we operate and source our products.”
During the past year, Starbucks UK expanded by opening 92 new outlets, bringing the total number to 1,304, which includes franchises. This expansion included 25 company-operated stores, raising that total to 398. However, the company also reported a reduction in overall staffing levels by 244 employees, resulting in a total workforce of 5,352, as it transitioned from part-time roles to full-time positions.
Starbucks indicated that its losses had increased in 2025, attributing this to a “challenging consumer environment marked by inflation, reduced discretionary spending, and heightened competition.” The organization noted that the cost of unroasted coffee had surged by over 35% since August 2025, while wages and benefits costs had risen by 7.8% compared to 2024, partly due to the government’s hike in employer national insurance contributions. The company also faced one-off expenses related to the closure of underperforming stores.
Starbucks UK reported that its parent group injected £30 million into the business to support its operations for the year ending September, with an additional £60 million contributed in February of the following year. This financial assistance was aimed at “bolstering the company’s liquidity amid the financial challenges faced in 2024 and 2025,” as well as addressing costs associated with its restructuring efforts.
The group secured a £70 million credit facility, set to expire in December, and as of the end of September, it had £166 million in debts due within a year, an increase from £144 million the previous year.
