UK Politics

Boris: Don't sneer at Starbucks over tax payment

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Media captionBoris Johnson said finance directors could not be blamed for doing their job effectively

London Mayor Boris Johnson has urged people not to "sneer" at the coffee chain Starbucks over its decision to pay £20m in corporation tax.

The company, which has come under considerable criticism for paying nothing over the past three years, announced the move earlier this month.

Critics described this as a desperate attempt to improve publicity.

But Mr Johnson told the BBC, Starbucks was showing "corporate responsibility" and the issue was "difficult".

The company has paid £8.6m in corporation tax in its 14 years of trading in the UK and nothing in the last three years, despite UK sales of nearly £400m in 2011.

'Significant amount'

Starbucks has reported a taxable profit only once in its 15 years of operating in the UK, often posting losses.

But it announced on 6 December that it would pay "a significant amount of tax during 2013 and 2014, regardless of whether the company is profitable". Experts estimated this would amount to about £20m.

This came after much public anger over the revelation of how little corporation tax it pays in the UK, with some people saying they would boycott its outlets.

Amazon and Google, have also been criticised for paying too little UK tax. They said they would not be following Starbucks' voluntary contribution lead.

Interviewed on BBC One's Andrew Marr Show, Mr Johnson said the tax issue was "a very difficult one", adding: "I cannot exactly blame the finance directors of these companies for doing their job."

He said: "Their salaries and livings depend on minimising the tax exposure obligations on their companies."

Mr Johnson said the government could "try to change the arrangements", but added: "If companies are going to show corporate responsibility... we shouldn't sneer at them."

Chancellor George Osborne announced in his Autumn Statement that more money was going to HM Revenue & Customs to tackle tax avoidance and evasion.

He said the aim was to get an additional £9bn in tax revenues every year.

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