Starbucks set to cave in and pay more tax after threats of boycott at its 'immoral' financial dealings
The US-owned coffee chain have not paid corporation tax for 14 yearsIt recorded no taxable profits despite enjoying a 31 per cent market shareThe chain is facing a boycott, backed by the Treasury chief secretary

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UPDATED:

07:34 GMT, 4 December 2012

Starbucks is set to pay more tax in the UK after it was accused of acting 'immorally' after it emerged that it has paid no corporation tax in 14 of the past 15 years

Outcry: Starbucks is set to pay more tax in the UK after it was accused of acting 'immorally' after it emerged that it has paid no corporation tax in 14 of the past 15 years

Starbucks is set to pay more tax in the UK following public outcry at its convoluted financial dealings.

The US-owned coffee chain was accused by MPs of acting ‘immorally’ after it emerged that it has paid no corporation tax in this country for 14 of the past 15 years.

The company, which enjoys a market share of 31 per cent, had a turnover of almost 400million in Britain last year – but recorded no taxable profits.

The Commons Public Accounts Committee said it found the figures ‘difficult to believe’.

The chain is facing a boycott, which was backed yesterday by the Treasury chief secretary Danny Alexander.

He and the Chancellor have now announced plans for a 10billion crackdown on tax-dodging by corporations and wealthy individuals.

On Sunday Starbucks confirmed it had opened talks with HM Revenue and Customs on its tax affairs, saying it ‘needed to do more’ on tax in the UK.

Yesterday it emerged that the company is preparing to change a controversial arrangement under which it sends 4.7 per cent of its turnover to the Netherlands, where it enjoys a special low tax rate.

The move is expected to result in the firm recording taxable profits in this country.

Starbucks declined to comment last night, but it is expected to make a detailed statement on the changes later this week.

The news emerged as the Public Accounts
Committee released a devastating report on HMRC’s handling of the tax
affairs of major corporations.

The Public Accounts Committee chairman Margaret Hodge called on ministers to reveal firms that were not paying their fair share and suggested that the Government should back boycotts

'Name and shame': The Public Accounts Committee chairman Margaret Hodge called on ministers to reveal firms that were not paying their fair share and suggested that the Government should back boycotts

MPs said Starbucks and fellow major
multinationals Amazon and Google have contributed to a 32billion tax
gap between the amount HMRC is due and the amount it receives, thanks to
legal ruses that slash their tax liability in this country.

The committee’s Labour chairman
Margaret Hodge called on ministers to ‘name and shame’ firms that are
not paying their fair share, and suggested that the Government should
back boycotts.

Treasury chief secretary Danny Alexander is backing a boycott

Crackdown plans: Treasury chief secretary Danny Alexander is backing a boycott

Warning that
corporation tax was in danger of ‘becoming voluntary’, she said: ‘At
the moment it’s a bit like David and Goliath, with the companies being
supported by very experienced, highly-paid accountants and lawyers.

'We
want to up the game from HMRC. I think they can take more cases to
court.’

She added: ‘We can say we won’t buy from companies. I think it’s good citizenship.’

Mr
Alexander dismissed the idea of naming and shaming tax dodgers, saying
confidentiality remained ‘a very important part of our tax system’.

In a
joint announcement, he and Chancellor George Osborne said HMRC will
receive an extra 154million over the next two years to clamp down on
tax dodging by major corporations and the super-rich.

The Treasury
forecasts the money will claw back 10billion over the next five years.

The
resources will be used to target so-called transfer pricing
arrangements, which critics say allow firms to shift profits to tax
havens abroad.

HMRC’s ‘affluence unit’ will also recruit 100 more
investigators.

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