Starbucks has agreed to annually pay around £10m in corporation tax for the next two years after striking a deal with the HMRC.
The world’s biggest coffee chain, which has more than 700 stores in the UK, has been under pressure to increase the amount of tax it pays, after it emerged the multinational corporation handed over just £8.6m in corporation tax to HMRC since 1998, despite more than £3bn in UK sales.
At a parliamentary committee Starbuck’s Chief Financial Officer Troy Alstead had told members that the company was not paying corporation and income tax because the company was not making any profit in the UK.
"The UK Starbucks business made a loss in 2007, we made a profit in 2006 for the first time that perhaps was a reference point in 07 made to the previous year, but that was the first profit the company made and it was a very small, six million pound profitability in that year."
Chancellor George Osborne had previously said in Parliament that there would be a crackdown on companies not paying their fair share of tax.
"We have got to be very clear at a time like this when we are dealing with the deficit, that people have to pay the taxes that are due, it is not right that wealthy people or multinational companies avoid the taxes that are due, so that is why we are investing more money and we are going to get billions of pounds back for the country, for the public and that will help us pay off the deficit."
Now the company’s managing director Kris Engskov has said:
"Having listened to customers and to the British public, Starbucks in the UK will be making changes which will result in the company paying higher corporation tax in the UK - above what is currently required by law.”
Written and presented by Alfred Joyner