Tax: Starbucks in talks with UK's Revenue and Customs

 
Cup of Starbucks coffee Starbucks is in talks with HMRC about how much tax it pays

Global coffee chain Starbucks has said it is in talks with HM Revenue and Customs and the Treasury over how much UK tax it pays.

It is one of several well-known firms that were criticised over the level of their corporation tax payments.

The firm admitted that it "needed to do more" in the UK on tax.

Meanwhile, Chancellor George Osborne has pledged more funds for the British authorities to tackle tax avoidance by multinationals.

He told the BBC that an announcement would be made on Monday about the "extra investment in the part of the Inland Revenue that tackles tax avoidance by multinational companies".

A Public Accounts Committee report on the topic of how much tax multinational firms pay in the UK is due on Monday.

In November the committee took evidence from executives from Starbucks, Google and Amazon over the amount of tax the companies have paid in the UK.

'Competitive'

"We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more," said a Starbucks statement.

"As part of this we are looking at our tax approach in the UK. The company has been in discussions with HMRC for some time and is also in talks with The Treasury."

Starbucks, which has more than 700 outlets across the UK, said more details would be released later this week.

BBC business correspondent Theo Leggett said the coffee company reported sales of nearly £400m in the UK last year, but paid no corporation tax at all.

"Much of the money it earns in this country is transferred to a sister company in the Netherlands in the form of royalty payments, leaving the UK division to report regular annual losses," he added.

Mr Osborne did not single out any firms while making his announcement on the Andrew Marr Show.

He also said that as well as his extra funding for the UK authorities, it was also necessary to work at an international level on the issue.

"It is actually Britain who has been working with Germany and France to get those rules on the international table," he said.

But he also warned against "pricing Britain out of the world economy", adding that "if we make our taxes less competitive that will just mean more companies stay out of Britain".

Campaign group UK Uncut said Starbucks' announcement was "a blatant admission of guilt" that it had intentionally avoided tax.

Spokeswoman Jane Harvey said: "The government's next step must be to close the loopholes that Starbucks and other companies use to avoid paying billions in tax to the UK, instead of targeting single mums and disabled people through slashing public services, the welfare state and privatising the NHS."

Monday's PAC report is expected to be critical of the current way in which multinational firms used UK tax legislation.

After last month's hearings, PAC chair Margaret Hodge MP said: "One of our concerns is that the ability of global companies to choose where they put their costs and their profits gives them an unfair tax advantage that damages UK-based businesses,"

 

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  • rate this
    +6

    Comment number 65.

    This is to little, to late. Starbucks faces stiff competition from other coffee chains on the high street and is now running scared of any boycott by tax payers in this Country. It should have thought of this before dodging tax, I , for one, will never shop there again

  • rate this
    +5

    Comment number 64.

    Wish i had the same arrangement with my tax bill. Always the same in this country the little guy always count the cost while the fatcats sit back and watch the money pour in .Cant blame them being greedy parasites when they are encouraged to do so.

  • rate this
    -117

    Comment number 63.

    If they start to pay tax then their prices will go up. I hope they dont start paying taxes as I want cheap prices, I couldnt care less about small independant shops.

  • rate this
    +9

    Comment number 62.

    So they should once its sorted I may have a coffee there but until then I will use companies that pay their tax.

  • rate this
    +9

    Comment number 61.

    we are a market of 60 million people. That is why companies want to come here. They are unlikely to spurn a "rich" almost 1st world country to avoid paying tax on PROFIT. Ossie needs to make them understand that they have to pay a percentage of their PROFIT in tax. He also needs to enforce this by closing the loopholes as fast as the accountants can find new ones. On PAYE , God help you !

  • rate this
    +8

    Comment number 60.

    How comes they were allowed to get away with it till now?? Did Osbourne not know they paid no tax?????

  • rate this
    +14

    Comment number 59.

    Amazon next?

    I have boycotted Amazon this Christmas.

  • rate this
    +10

    Comment number 58.

    Maybe the flood of email protests to starbuck's website did some good then! There should be a full list of companies that are avoiding paying tax. Someone on here mentioned Boots? I spend a small fortune there (they are so expensive, but I don't have many other options where I live). If they are avoiding tax too I would like to know!!

  • rate this
    +22

    Comment number 57.

    Starbucks is a con anyway.

  • Comment number 56.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +3

    Comment number 55.

    Ha the HMRC are too scared to chase ALL those big Corporations for their tax same as Osborne and the rest that Govern us no matter what colour party is in!
    "Will they stay or will they go!" These big Corps and Big Banks Own the Government and us little people They will pay what they want in Tax only for some back hand ploy to screw us the tax payer even more to keep them here in the UK.

  • rate this
    -3

    Comment number 54.

    Whilst I completely agree on Starbucks Corp paying tax

    Are the actual shops not franchises?, So they pay to "Starbucks Corp"

    So boycotting the shops will ultimately hit "Starbucks Corp",
    But that just puts the shops and workers at risk

    "No I don't work for Starbucks, and I may have franchise wrong?"

  • rate this
    +49

    Comment number 53.

    I'm not buying from any of these leaches ever again

    I'd rather buy a bottle of water from a small local shop than give these parasites any more money

    Amazon can go & whistle too. They might be cheaper sometimes, but the overall cost to society due to their sneaky ways means that I'm harming the economy by buying things from them

    Google is a skewed search engine now too, not fit for purpose!

  • rate this
    +4

    Comment number 52.

    Whenever there's a discussion on this site, certain individuals always blame the previous government. This, as well as the vast majority of any social or financial issues are the result of ALL politicians of EVERY persuasion encouraging big (usually international) business at our expense

  • rate this
    +232

    Comment number 51.

    Any business operating within the UK should pay tax, no exceptions!

  • rate this
    -101

    Comment number 50.

    I'd rather have shareholders getting the money than the government.

  • rate this
    +19

    Comment number 49.

    I expect their UK profits are down as some conscientious coffee drinkers choose Costa or local companies instead. That would be the only thing to make Starbucks start talking.
    The thing is none of these companies are doing anything illegal. If you are a multinational company you can base your EU operation wherever it suits, so they choose a country with low corporation tax. It is an EU issue.

  • rate this
    +23

    Comment number 48.

    I have stopped buying Starbucks since their Select Committee appearance. Several cups of coffee, breakfast and lunch goods - probably £25/week at least less going into their pockets. Sorry for my local franchise holder but in the end the company has to be hit in the pocket. At least the combined effect of all our small actions seems to have brought them to the table. Hope they make progress soon!

  • rate this
    +7

    Comment number 47.

    There's a very simple solution to all this staring us in the face that nobody of note seems to be talking about - Land Value Tax.
    If each of the Starbucks outlets, each of the Amazon warehouses etc. were paying the same for the land they're using as their neighbouring SME we'd have a level playing field. If they happen to be able to make a bigger profit per sq ft than others good luck to them.

  • rate this
    +11

    Comment number 46.

    How long until they slip back?
    What they have done in the past was calculated and deliberate e.g. buying coffee at a 20% premium from their swiss operation wthere the tax is almost zero.

 

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