The coffee chain Starbucks has said it is in talks with HM Revenue and Customs (HMRC) and the Treasury in the UK over how much corporation tax it pays in the country, after the chain was previously lambasted over claims of tax avoidance by Parliament’s Public Accounts Committee (PAC) on 12 November.
Starbucks, along with Google and Amazon, were criticised by the PAC for not paying enough UK corporation tax on the large operations all three firms have in the country, with complicated offshore accounts and ‘brass plate’ offices in Luxembourg and elsewhere coming in for criticism, amid calls for a boycott of all three companies.
The chair of the PAC, Margaret Hodge, attracted particular attention, when in response to Matt Brittin, who runs Google’s northern European businesses, denial that his firm had done anything legally wrong, she said: “We’re not accusing you of being illegal; we’re accusing you of being immoral.”
The PAC group, made up of cross-party Members of Parliament (MPs), has released its report today into the hearings it held on 12 November, with Hodge calling for HMRC to be “more aggressive and assertive in confronting corporate tax avoidance” in future.
Starbucks has come out worse over the tax avoidance furore with activist group UK Uncut announcing a ‘day of action’ on 8 December with plans to use the shops as refuges for women and children’s crèches. The argument being that all these services face cuts due to the non-payment of tax. The coffee chain attracted widespread derision in the UK, for only reporting a taxable profit once during its very successful 15 years of operation in the country.
Responding to the publication of the PAC report, Starbucks said in a statement: “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. 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.”
Meanwhile, the UK Chancellor, George Osborne, has said he’ll provide more funds for the British authorities to tackle tax avoidance by multinationals in the future. An extra £77m a year has been earmarked to fund more investigative staff at HMRC. The two-year programme is expected to bring in £2bn in unpaid tax.
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