Starbucks. Photograph by Marco Paköeningrat
Starbucks is one of a number of companies that have recently been shown to be avoiding paying their “fair share” of tax into the UK economy. Their negligible tax bill has been the result of legal tax avoidance, but that has not stopped there being a continued campaign against the company by groups such as UK Uncut and more recently being brought in front of a Commons committee to explain their situation.
Kris Engskov, managing director of Starbucks UK, announced that the company would pay up to £20 million in extra tax over the next two years, describing the payments as:
“A significant amount of tax during 2013 and 2014, regardless of whether the company is profitable during these years”
Such a voluntary move is unprecedented, with other “tax efficient” international corporations such as Google, Amazon, and AOL (owner of the Huffington Post) remaining resolute that they should not have to pay any more than they already do.
HM Revenue and Customs restated that corporation tax was not voluntary, saying:
“The public expects businesses to pay their fair share and HMRC will challenge, through the courts if necessary, any structures or tax payments that do not comply with the UK tax law.”
UK Uncut has said that its protests against Starbucks would continue unabated, saying:
“Offering to pay some tax if and when it suits you doesn’t stop you being a tax dodger. Today’s announcement is just a desperate attempt to deflect public pressure…The £10m that Starbucks has estimated it may end up paying is £5m less than that paid by their nearest competitor Costa coffee.”