Radio New Zealand - Te Reo Irirangi o Aotearoa

Starbucks to pay more tax in Britain

Updated at 8:39 am on 7 December 2012

Starbucks says it will pay more tax in Britain, after disclosures about how little the American coffee chain, currently pays, led to a public outcry.

Some people called for a boycott because the company was registering its profits abroad and paying little in corporation tax in Britain.

Managing director Kris Engskov said the extra tax could amount to £20 million over the next two years,

HM Revenue and Customs reacted by saying that corporation tax was not ''a voluntary tax" and it would challenge, through the courts if necessary, any structures or tax payments that do not comply with the UK tax law.

The BBC reports the company has paid £8.6 million in corporation tax in its 14 years of trading in Britain, and nothing in the last three years - despite UK sales of nearly £400 million in 2011.

Starbucks has reported a taxable profit only once in its 15 years of operating in Britain, often reporting losses.

Mr Engskov said the company had found it difficult to make profits in Britain, 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". Starbucks has 760 outlets in Britain.

Meanwhile, Google, another company criticised over its tax affairs in Britain, said it won't change its arrangements as they comply with British tax rules.

In a statement, Amazon said: "Amazon pays all applicable taxes in every jurisdiction that it operates within."

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