Starbucks to pay tax

[SiHart]

Hmm, about time too!

Coffee chain Starbucks has agreed to pay more UK corporation tax, after a public outcry over how little it pays.

Kris Engskov, managing director of Starbucks UK, announced that the company would pay "a significant amount of tax during 2013 and 2014 regardless of whether the company is profitable during these years".

The extra tax could amount to £20m over the next two years, he said.

"We know we are not perfect", the boss of the coffee chain added.

The company admitted that the degree of anger and emotion surrounding the tax issue had "taken us a bit by surprise" and that the move was an attempt to rebuild trust with its customers.

"Since we started doing business here, we have always organised our tax affairs according to the letter of the law," said Mr Engskov.

But he maintained that the company had found it difficult to make profits in the UK, which has "the most competitive espresso market in the world", despite "two million customers visiting us each week in hundreds of stores across the UK".

Companies pay corporation tax on any profit they make in the UK, not their revenue or takings. Hence allegations that multinationals move money to other countries to reduce how much tax they pay in the UK.

The extra tax payments will be funded by not claiming "tax deductions for royalties or payments related to our intercompany charges", Mr Engskov said.

Starbucks has 760 outlets across the UK and says it contributes "£300m to the UK economy" each year.

[Dirk Gently]

Hmmm, I'll believe it when I see it.

[SiHart]

Maybe they suspect their profits will drop if they don't make this token gesture?

[Perry Vale]

Has anyone been boycotting Google or Amazon?

[WhiteCrowNZ]

I don't know if anyone saw the way Apple organises itself when it comes to taxes, but it's not an isolated incident.

The way you can (legally) organise your affairs so you do business in one state/country, but pay tax against another country with has a lower rate, and for which you only keep a token office is ridiculous. With the gobalisation it's now just too easy to do business in the UK, but pay tax to the Irish government instead.

But when corperations and the super-rich do it, it's all fair and above board. And yet it very much seems there's a government who claims to hound down tax dodgers ... just the poor ones they didn't go to public school with.