Again, after the Amazon, Starbucks, eBay, Google and other business tax avoidance scams comes Caffe Neros nice little number. Since 2007, Caffe Nero hasnt anything in corporation tax even though it made over £100 million in profit. Another example of a two-tiered tax system: one for them and one for us.
Coffee chain Caffe Nero has not paid a penny in UK corporation tax since 2007 despite racking up around £100million in profits.
The popular British coffee house has become the latest big firm to come under fire over its tax affairs, in the wake of US behemoths Starbucks, Amazon, and Google.
One MP said the revelations over its tax affairs would be ‘hard to take’ for family-owned cafe owners around the country and accused Caffe Nero of ‘free-loading on the back of British taxpayers’.
The Italian-style coffee house has become a firm fixture on the High Street, with 566 outlets in the UK.
Over the weekend the chain announced ambitious plans to open another 225 outlets over the next five years, creating 1,700 new jobs. It is also expanding into the US. But HM Revenue & Customs has very little to show from Caffe Nero’s breakneck expansion since it started life in 1997 as single coffee house in South Kensington. Analysis of its company accounts show it has not paid any tax since its financial year ending May 31, 2007.
In the period since then it has notched up just under £1billion in sales and made profits before tax of around £100million.
Latest filings to Companies House shows the privately-owned company made a £21.1million profit in the year ended May 31 2013 and generated £204.3million in sales.
Founder, chief executive and chairman Gerry Ford has defended his business’s tax affairs, arguing profits have been wiped out by interest payments on its debts of £250million.
The 56-year-old entrepreneur also told a Sunday newspaper that his firm’s complex structure, including the decision to base its holding company in Luxemburg ‘has no implications for our corporate tax at all’.
He added: ‘It wasn’t set up as a financial engineering thing. We’re not in the same category as Starbucks.’
Mr Ford, who owns 60pc of Caffe Nero since taking the company private in 2007, added that the firm paid £21million in VAT last year and £13million in National Insurance contributions.
But last night the comments received short shrift from MPs and campaigners.
John Mann, the Labour MP and member of the influential Treasury Select Committee said:
‘Its unfair competition. If other cafes around the country including those owned by families are paying proper British taxes, why shouldn’t this company? I think people will be shocked to see Caffe Nero is free-loading on the back of the taxpayers’.