Jessica Fino 28 Feb 2017 11:55am

Caffè Nero avoids paying corporation tax

The coffee shop chain has avoided paying corporation tax in the UK despite making profits of £25.5m

Caffè Nero posted revenues of £257.6m in the year ended May last year, while profits rose 8.5% to £25.5m, according to Companies House filings.

However, the company said that it did not pay corporation tax because its owner Rome Pikco posted an annual loss of £22.2m.

“The Rome Pikco group’s taxable loss arose due to third party, arm’s length interest payment to banks.

“Therefore, no entity within the Rome Pikco was due to pay tax for the year,” the financial statement said.

Caffè Nero has not paid any corporation tax in the UK since 2007.

Over the last financial year, Caffè Nero has opened 31 new stores. It now has 613 stores in the UK and Ireland.

Charlie Elphicke, member of the Public Accounts Committee (PAC), tweeted, “It's wrong for large companies to take money from British customers but not contribute to cost of public services.”

Prime minister Theresa May said in a speech last year that she would launch a renewed tax crackdown on multinational companies during her term.

She said, "It doesn't matter to me whether you're Amazon, Google or Starbucks, you have a duty to put something back, you have a debt to your fellow citizens, you have a responsibility to pay your taxes.”

In January last year Google, which has faced years of public backlash over the amount of UK corporation tax it pays, reached a deal with HMRC to pay £130m back in tax covering a 10-year period.

Coffee chain Starbucks also faced scrutiny in 2012 when it was revealed to have paid only £8.6m on £3bn worth of sales since it first entered the UK market.