Starbucks has racked up £1.2bn in UK sales for the last three years. But the world's second biggest coffee chain has paid precisely zero in UK income tax. Starbucks - it has 735 outlets in the UK - hasn't done anything illegal.

But it's another example of legal tax avoidance measures deployed by corporates, putting more pressure on UK taxpayers.

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De-tax to go

The issue is complicated by Starbucks claiming that the UK business is profitable despite accounts filed through Companies House claiming to show sustained losses - despite Starbucks telling investors that the UK business is profitable.

Quite how a business turns operating profits into tax losses is still unclear, but it's likely labyrinthine royalty and tax arrangements through a subsidiary supply chain, often referred to as transfer pricing, plays a large part.

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Because Starbucks appear to pay barely any UK tax, that means more pressure on HM Treasury to extract taxes from other sources. Like ordinary non-chain coffee shops and snack bars that do have to pay their full whack in taxes (and who can't afford tax specialists to advise them on funnelling tax through offshore havens or partner businesses or subsidiaries).

Not a bean

HMRC says they don't comment on the tax affairs of individual businesses though it claims it does use specialist tax experts to ensure that multinationals play by the rules. But clearly their effectiveness - particularly with regard to corporation tax liability and the UK tax code - looks questionable.

Especially when you compare the profits of Whitbread-owned Costa: Costa shelled out £15m last year in profits, about a third of its total profits. In total, it's thought Starbucks paid just £8.5m in tax - in almost 15 years of UK trading.

This story follows concerns about other multi-nationals like Amazon that also pay very little in corporation tax. Defenders of such corporate tax practices point to the job creation opportunities such companies provide.

Tax tricks to improve your wealth

  • 1. Uniform tax
    <p> If you wear a uniform of any kind to work and have to wash, repair or replace it yourself, you may be able to reclaim tax paid over the last four years. For some people, this could mean a windfall worth hundreds of pounds</p>
    1. Uniform tax
  • 2. Savings tax
    <p> The interest you receive on savings accounts (with the exception of cash Isas) is automatically taxed at a rate of 20%.</p> <div> </div> <div> Higher-rate taxpayers therefore tend to owe money on the interest they are paid throughout the year. If, however, you are on a low income or not earning at all, you should be able to claim all or some of the tax deducted back</div>
    2. Savings tax
  • 3. Vehicle tax
    <p> You can apply for a refund of vehicle tax if you are the current registered keeper or were the last registered keeper of your vehicle that no longer needs a tax disc</p>
    3. Vehicle tax
  • 4. Pension tax
    <p> If you pay tax on a company, personal or State Pension through PAYE (the system employers use to deduct tax from your wages), you may well end up overpaying</p>
    4. Pension tax
  • 5. National Insurance contributions
    <p> There is a limit to the amount you need to pay in NI, whether or not you work for an employer.</p> <p> Instances in which you may find that you have overpaid include if you work two or more jobs and earn more than &pound;817 a week and if you move from self-employment to employment, but continue to pay Class 2 National Insurance contributions</p>
    5. National Insurance contributions


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