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Tax Nightmares – The Curious Case of Caffe Nero

By December 12, 2014March 15th, 2021No Comments

Caffe Nero has declined to comment on a customer’s letter that has gone viral accusing it of failing to “pay its dues” by not paying corporation tax.


Each year the UK economy loses nearly £5 billion in unpaid corporation tax.


A staggering figure.


Yet, Caffe Nero hasn’t contributed a single penny in corporation tax since 2007 despite notching up around £1 billion of sales and pre-tax profits of over £100 million during that period.


This revelation has led to a customer taking a principled stand against the popular coffee house chain.


Steve Pottinger, 51, who works in the music business and also performs poetry around the UK, wrote to Caffe Nero expressing his disgust, enclosing his loyalty card in protest.



Mr Pottinger became irritated by Caffe Nero’s tax affairs a few weeks ago when he read that the company had made a pre-tax profit of £21.1 million in 2013 but paid no corporation tax, despite operating more than 500 cafes across Britain.


The firm has rebuffed similar allegations previously. Their defence is that tax-deductible interest payments on debt used to purchase the business have made the company exempt from corporation tax.


In the letter, Mr Pottinger stated: “I’m aware that what you do is perfectly legal… but at a time of austerity when vital services face cutbacks, it sticks in the craw. Loyalty cuts both ways. But you seem to have a disconnect when it comes to your responsibilities to paying your dues.”


A Caffe Nero spokesperson claims there were “lots of things” in the letter that were “factually incorrect”.


When asked what these were, the response was: “We don’t want to get into it.”


KinsellaTax staff consists of ex-HM Inspector of Taxes and ex-HM Custom and Excise Officers, fully trained in all types of HMRC Investigations.


To discuss a tax avoidance enquiry in confidence with one of our professional tax investigation advisors call 0800 471 4546 today, or alternatively you can send your enquiry online.



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