Luke Johnson defends Starbucks over corporation tax storm

Restaurant entrepreneur Luke Johnson has defended coffee chain Starbucks following criticism over the amount of tax the American giant pays.

Starbucks yesterday announced that it was planning to change the way it operates so that it would end up paying corporation tax in the UK. It was heavily criticised for not paying any, despite annual sales of £398m.

But speaking at yesterday's Arena Christmas lunch, Johnson, who called for lower taxes for the hospitality sector, said that Starbucks had been unfairly singled out.

"Starbucks pays huge amounts in property rates, huge amounts in national insurance, lots of VAT.

"I have looked at their accounts before and actually I don't reckon they do make that much profit. As a nation, even if we have overseas investors here who pay no corporation tax at all and create enormous amounts of jobs, we are still better off. I am afraid to say it is one of those examples where superficial reporting, ignorant MPs and unsophisticated level of debate means there has been a misrepresentation of the facts."

He highlighted that other international firms, including the likes of Google, were likely to make significantly higher profits but employed fewer people. Google has also been criticised in the press for the amount of tax it pays - the internet giant paid £6m in corporation tax last year, and employs 1,500 people. Starbucks employs 8,500.

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