Starbucks’ UK retail business received a £13.7m corporation tax credit last year, despite growing sales by 6 per cent and adding more than 90 stores.
Accounts filed at Companies House show the coffee chain’s UK retail arm increased sales to £556.3m in the 12 months to the end of September, helped by price rises, loyalty scheme activity and the rollout of freshly baked in-store food.
However, full-year losses widened to £41.3m.
The tax credit can be used to offset future tax liabilities and comes after Starbucks UK also paid no corporation tax for 2024, when it posted a £35m loss.
The latest loss was close to the £40m the business paid in royalty and licence fees to its parent company during the year, a structure that has again drawn criticism from campaigners.
Paul Monaghan, chief executive of the Fair Tax Foundation, said the figures echoed previous concerns around the group’s UK tax position, with rising revenues and store numbers sitting alongside continued losses driven in part by significant royalty payments to other Starbucks entities.
Those fees were paid to Starbucks Emea, a UK-based group company that collects similar payments from across Europe, the Middle East and Africa.
That business paid $27m in corporation tax, although it is unclear how much of that total was paid in the UK given the international nature of its revenues.
Starbucks Emea reported profits of $84.5m on revenues of $402m, after paying almost $65m under a cost-sharing agreement with its US parent and a further $17m in support fees to Starbucks Italy.
The group also paid a $207m dividend to its US parent.
A Starbucks spokesperson said the business was committed to paying all taxes owed in the markets where they arise.
“As a responsible business, we manage our global tax responsibilities in keeping with our mission and values,” the spokesperson said.
“Our approach to tax aims to align with the needs and long-term interests of our various stakeholders – including governments, shareholders, partners and the communities where we operate and source products.”
Despite the growing pressure on profitability, Starbucks continued to expand its UK footprint over the year, opening 92 new outlets to take its total estate to 1,304 stores, including those run by franchise partners. Of those, 25 were company-operated, taking that total to 398.
The business said overall headcount fell by 244 to 5,352, reflecting a shift away from part-time roles towards more full-time staffing.
Starbucks warned that losses had continued to widen in 2025 against what it described as a difficult consumer backdrop, with inflationary pressures, weaker discretionary spending and rising competition all weighing on performance.
It also pointed to sharp cost inflation, saying unroasted coffee prices had risen by more than 35 per cent since August 2025, while wages and benefits costs were up 7.8 per cent year on year, partly due to higher employer National Insurance contributions. T
he business also took a one-off hit linked to the closure of some underperforming stores.
To support the UK operation, Starbucks said its parent group injected £30m into the business during the year to the end of September, followed by a further £60m in February.
The company said the additional funding was intended to strengthen liquidity amid the financial pressures experienced in 2024 and 2025, as well as support costs linked to its restructuring efforts.
Starbucks UK also drew on a £70m credit facility, which expires in December. At the year end in September, debts due within one year had risen to £166m, up from £144m the previous year.
Click here to sign up to Retail Gazette‘s free daily email newsletter
