Starbucks chief Troy Alstead faces grilling on tax

Starbucks chief Troy Alstead was today told his claims that the coffee chain continually made a loss in Britain 'just doesn't ring true' (Reuters)

Starbucks chief Troy Alstead was today told his claims that the coffee chain continually made a loss in Britain “just doesn't ring true”.

Mr Alstead, global chief financial office at the company, denied lying to shareholders over the chain's accounts when he appeared before MPs investigating the taxation paid by multinational companies.

The US chain is reported to have paid nothing in corporation tax to the UK over the last three years and has filed losses with Companies House for most of the years it has been operating in the UK.

Margaret Hodge, who chairs the committee of public accounts, questioned how that could happen when a statements the committee had seen showed a former chief financial operator said in 2007 the division had an operating profit rate of 15%.

Mr Alstead denied knowledge of the statements and insisted the first profit Starbucks made was £6 million in 2006.

Mrs Hodge questioned why the company had filed millions in losses then promoted the head of the UK business, Cliff Burrows, to take over the US operation.

She said it did not "ring true" that the man in charge of an operation that was running such an unsuccessful division would be promoted.

Mrs Hodge told the coffee chain boss: "You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true.

"You are losing money. You have tried for 15 years and failed and you have promoted the guy who failed.

"It doesn't ring true Mr Alstead, that's what frustrates taxpayers in the UK."

She added: "Are you lying to your shareholders?"

Mr Alstead replied: "Absolutely not."

"We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically."

The public accounts committee is also questioning Matt Brittin, chief executive officer of Google UK and Andrew Cecil, public policy director at Amazon, in the wake of a wave of revelations about the tax affairs of international companies.

PA