Caffè Nero bypasses the taxman again

The coffee chain Caffè Nero paid no corporation tax for the third year in a row despite making a pre-tax profit of £21.1m, up 11 per cent on last year, according to its latest accounts.

It legally routed its operations through its parent company in the Isle of Man and used a complex structure of subsidiaries to avoid corporation tax on its profits. Sales increased 4.6 per cent to £204m in the year to the end of May but the accounts filed with Companies House show it paid zero income tax by claiming group relief and deferred tax to its other businesses. Caffè Nero has 519 UK stores, with bosses hoping to increase that number to at least 750. It expects to open a further 45 this year.

Last year the company came in for criticism for not paying any corporation tax. Rival Starbucks bowed to public pressure and agreed to pay £20m to the Government after it was revealed it had paid no corporation tax for at least three years by paying various premiums to companies in Switzerland and the Netherlands.

Following an outcry over corporate tax avoidance, Business Secretary Vince Cable called on the Treasury to “get to grips” with the issue. Caffè Nero’s chief executive, Gerry Ford, was unavailable for comment.