Coffee giant Starbucks’ biggest UK business paid less in corporation tax than it did two years ago.
Newly published accounts for the company which oversees its 1,000 own and franchisee-run stores showed it plunged £17million into the red in the 12 months to September last year.
Bosses blamed “challenging” trading conditions and taking a £20million non-cash hit from slashing the value of leases on loss-making stores.
Accounts for the Starbucks Coffee Company UK showed it nevertheless paid £4million in corporation tax here, up from £3.3million in 2017.
However, it was still less than the £6.7million it paid in 2016.
The accounts for six of Starbucks’ other UK-based businesses have also been published.
They deal with franchisees that operates its stores in Europe, the Middle East and Africa (EMEA), with a big chunk of their income coming from collecting royalties for using the Starbucks name.
The six EMEA businesses saw their combined turnover edge up 1.3% to £181million in the year to September 2018.
Profits jumped nearly 50% to £78million thanks largely to booking a payment from Nestle which is making products under the Starbucks name.
The six firms paid a combined £18.6million in UK corporation tax last year, up 69% on 2017, and meaning they tax rate of 23.7%.
The main one of those six also received a £116million dividend, mostly from its Dutch arm, where Starbucks’ roastery is based.
Starbucks said this dividend was not liable for UK corporation tax as it had already been paid in Holland, although it refused to say how much.
While Starbucks handed a combined £22.6m in UK corporation tax last year, it paid its US parent company a bumper £353million dividend.
The payment to Starbucks Corporation was up from just £47million in 2017 after tax rule changes in the US.
Martin Brok, president of Starbucks Europe, Middle East and Africa, said business had been “challenging”.
He added: “From the changing consumer landscape to high rents and political uncertainty, there are ongoing pressures across the region.”
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