Starbucks in the United Kingdom has offered to pay £20 million more in company tax over the next two years in response to demonstrations in its stores by tax activists.
“I am announcing changes which will results in Starbucks paying higher corporation tax in the UK – above what is currently required by law,” said Kris Engskov, the managing director of Starbucks UK.
“Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges.
“In addition, we are making a commitment that we will propose to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years.
“These decisions are the right things for us to do. We’ve heard that loud and clear from our customers.”
It’s a precedent-setting move, and one that has drawn scepticism from activists. One such group, UK Uncut, told tie Financial Times that “offering to pay some tax, if and when it suits you, doesn’t stop you from being a tax dodger.”
In a statement, Her Majesty’s Revenue Service said: “Corporations tax is not a voluntary tax and parliament set the rules and rates for businesses to follow.”
Starbucks, along with a raft of other multinational corporations, has been under pressure in recent months to justify its small tax contributions to the governments of the countries it operates in. In Australia, Assistent Treasurer David Bradbury has criticised Google and Apple for paying low rates of tax.
Myriam Robin is a media reporter at Crikey. She’s an economics graduate who previously reported on business for LeadingCompany and SmartCompany.
