Starbucks Pays UK Corporation Tax After 5-Year Gap

US-based coffee giant Starbucks has paid corporation tax in the UK for the first time in five years, after a high-profile campaign by G8 leaders against tax avoidance.

The global coffee chain, which earlier faced severe criticism from consumer groups and the British Government over tax avoidance, said it has paid £5m ($7.7m, €5.9m) in British corporation tax and will pay another £15m by the end of next year.

The tax, currently at a rate of 23%, is levied on the profit of a business.

Following mass protests, Starbucks has admitted it did not pay any tax in Britain between 2009 and 2012, because it made no profit in the UK.

Although the company insists it continues to make losses in Britain, and is looking to close some of its 650 outlets across the UK, it has promised to start paying corporation tax before its UK finances enter the black.

"Six months ago, we felt that our customers should not have to wait for us to become profitable before we started paying UK corporation tax," Starbucks said.

"We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10 million in corporation tax this year and a further £10 million in 2014. We have now paid £5 million and will pay the remaining £5 million later this year

"We are also undertaking measures to make Starbucks profitable in the UK, such as relocating unprofitable stores to more cost effective locations, closing them where that is not possible and placing greater reliance on franchised and licensed stores."