Starbucks to pay more to UK after criticism over tax arrangements

By DAVID MADDOX
Published on 04/12/2012 08:47

THE coffee chain Starbucks is set to change its tax arrangements and pay more to the UK Exchequer after stinging criticisms over the way it and other multi-nationals used the rules to avoid houndreds of millions of pounds, it has been reported.

UK bosses of Starbucks had entered talks with tax collectors at HMRC as Chancellor George Osborne and Chief Secretary Danny Alexander announced new measures to recoup £2 billion a year from multi-nationals operating in the UK.

The two Treasury ministers unveiled £77 million investment a year for the next two years in HMRC to help pursue multi-nationals and wealthy individuals.

At the same time they also revealed that at least £5 billion will be recouped from Swiss bank accounts from wealthy tax dodgers thanks to an agreement that came in last year.

Starbucks refused to confirm the reports that it had agreed to change its arrangements and more pay more tax but the company which has 700 outlets in the UK did not deny the reports either.

It was accusedalonjg with Google and Amazon of “immorally” minimising their UK tax bills in a damning report by the commons Public accounts Committee.

On his new measures against tax avoidance, Mr Osborne said: “The Government is clear that while most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share, sometimes by breaking the law.

“In Britain we want successful businesses, we want a very competitive tax system. But people have to pay those taxes that are due, and that includes multinational companies.”

Labour Treasury spokeswoman Catherine McKinnell said: “This funding is welcome, but it’s a tiny proportion of the over £2 billion of deep cuts to HMRC that George Osborne has pushed through. If the Government was serious about tackling tax avoidance, they’d rethink their plan to cut a further 10,000 HMRC staff, which risks being a false economy.”

TUC General Secretary, Brendan Barber, added: “Five years after the TUC identified that tax avoidance was costing the country £25bn a year it’s good to see ministers finally taking action to recoup this money.

“But none of the proposals announced will force big companies like Starbucks and Amazon to pay more tax. To do this we need a far stronger General Anti-Avoidance Rule than the one the Government is proposing.”