Starbucks was today warned that its decision to pay a “voluntary” £20 million to HM Revenue and Customs will backfire unless it vows to pay the correct amount of corporation tax permanently.
The coffee chain bowed to public outrage over its tax affairs and yesterday agreed to make a voluntary £10 million annual offering to HMRC for the next two years.
Starbucks has not paid corporation tax for 14 of the past 15 years of trading in the UK, despite owning more than 700 cafés and taking more than £3 billion in sales since launching in Britain.
Last year the company registered sales of £398 million but claimed to make a loss of £33 million, giving it a corporation tax bill of zero. Starbucks will now pay £10 million for last year and the same sum for next year despite not knowing what its profits will be.
Labour MP Margaret Hodge, a member of the Public Accounts Committee, said: “This has to be lasting. Paying tax is not a voluntary undertaking. It is not a PR gesture.”
Conservative MP Stewart Jackson said: “They clearly had a public relations problem. This was a damage limitation exercise. They were facing the prospect of a boycott.
“But it may have backfired on them. It could be seen as them dipping into the Christmas fund — bunging the taxpayer some money to take the heat off.”
He added: “This is the beginning of a process where they hopefully end up paying their fair share of tax.”
