Starbucks has bowed to public and political pressure by agreeing to pay up to £20m over the next two years in tax
Following the announcement earlier this week that the coffee giant was considering changing its accounting practices, it has conceded that against “the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more.”
The chain is one of several multinationals to have come under increasing public scrutiny over the amount of tax paid in the UK, culminating in the Public Accounts Committee report on Monday which descibed the figures paid as an “insult”.
The company's UK managing director Kris Engskov 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.
"Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges."
The statement continued, "In addition, he is announcing a commitment that Starbucks will propose to pay a significant amount of corporation tax in the UK during 2013 and 2014 regardless of whether our company is profitable during these years."
HMRC has yet to approve the strategy outlined by the US company.
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