article: Starbucks is embroiled in fresh controversy over its tax affairs after it was accused of using a little-known British company to avoid paying taxes across Europe. The U.S. coffee giant is being probed by the European Commission over some of the methods it used to lower its tax bills. It could face millions of pounds in back taxes if they are found to be illegal. For the first time yesterday, details emerged about the UK company at the heart of the probe, which is focusing on sweetheart tax deals between Starbucks and the Dutch government. Probe: Starbucks ran its European division - including the UK - through the Netherlands, but it paid just £1.9million in tax to the Dutch government, from a reported £300million profit . Starbucks ran its European business, including its booming UK division, through the Netherlands where it paid almost no tax on its profits. But it has now emerged that the coffee chain used a defunct British entity to hide potentially millions of pounds from the Dutch taxman. By registering its Intellectual Property – such as its brand and logo – in a UK company called Alki LP, it was able to pay hefty sums from its Netherlands division into Britain. Its Dutch division paid just £1.9million of tax, despite reporting profits of £300million – a meagre tax rate of less than 1per cent. A Wall Street Journal investigation has uncovered previously unknown details about the UK entity, including a claim that it had not a single registered employee. Starbucks has already been called ‘immoral’ by MPs for its labyrinthine structure that effectively funnelled money out of the UK. Schemes used by the company include buying its coffee beans in Switzerland and selling them at a 20per cent mark-up to the Netherlands, where they are then roasted before being sold on again to Britain. This means that much of the money it makes from UK sales flows into jurisdictions that have lower or less stringent tax regimes. Revealed: It is now claimed the company, which has previously been in the spotlight for its tax practices, may have used a British company to put hefty sums from its Netherlands branch into the UK . Between 1998 and 2012 the company paid just £8.6million in corporation tax in Britain, despite racking up combined sales of more than £3billion here. But after its tactics were exposed, the company offered to pay a voluntary £20million in tax to avoid a public boycott. Now details of a little-known tax division have emerged. A UK-registered holding business called Alki LP was set up to house the branding of the business. In a bizarre move, Alki appeared to have no employees – and was registered at the offices of Starbuck’s tax lawyers Baker & McKenzie. Compliance: A Starbucks spokesman said the company complies 'with all relevant tax rules, laws, and OECD guidelines' But because of the very limited details available, it is impossible to identify how much money the arm received – or whether it paid any tax in the UK. Accounts for Starbucks’ Dutch businesses show that they paid several million pounds a year into the division. But without access to full corporate documents it is impossible to tell whether this remained in the UK division or was funnelled straight into another tax haven. The business, which was closed down last year, has never filed proper accounts at Companies House. When it was dissolved, Alki was folded into a new company, Starbucks EMEA Holdings – though this business has also yet to file any accounts. This is an aspect that EU investigators believe is key to their probe. Earlier this year the British boss of Starbucks provoked outrage after suggesting the company would not pay ‘normal’ levels of tax for years. UK managing director Mark Fox said the company needed to get ‘its mojo back’ before it would begin to turn a profit. But he was confounded only weeks later when Starbucks reported its first ever UK profit of £1.1million – despite sales being a bumper £300million. On this it paid taxes of just £232,363, as well as the sum of £11.2million as part of its voluntary £20million tax payment. A Starbucks spokesman said: ‘We comply with all relevant tax rules, laws, and OECD guidelines and we continue to cooperate with the European Commission’s state aid investigation in the Netherlands.’
highlights: Starbucks ran its European business - including UK - through Holland .
  But Dutch division paid just £1.9million tax on profits of £300million .
  Now details of UK company at heart of new probe have started to emerge .
  A Starbucks spokesman said it complies 'with all relevant tax rules, laws'
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