Dec. 6 -Coffee chain Starbucks has given in to pressure from UK lawmakers, campaigners and consumers, and says it will pay up to 20 million pounds more in UK tax. Starbucks, along with other multinational companies like Google and Amazon, pays very little tax in Britain, despite making substantial sales there and independent retailers are calling on the government to change tax rules. Joanna Partridge reports.
They've finally given in to the pressure. Starbucks says it will pay around £10 million a year in UK corporation tax in 2013 and 2014 - more than required by law. It hadn't paid any for the last three years - legally. But criticism from lawmakers, campaigners and consumers proved too much and Starbucks is now changing its accounting practices. A Reuters investigation of Starbucks accounts showed the company had reported years of losses at its UK unit, while telling investors the operation was profitable and performing well. Starbucks isn't the only multinational that was questioned by UK lawmakers - Google and Amazon also make substantial sales in Britain but don't pay much tax. The government has said it will spend more money to tackle tax avoidance. Amazon channels its sales through Luxembourg. This is legal, but small businesses complain this puts them at a disadvantage. Morag Watkins and Sheryl Shurville run two independent book shops near London. SOUNDBITE: Sheryl Shurville, Co-Owner The Chorleywood Bookshop, saying (English): "An unequal playing field between Amazon and the likes of us small businesses, because we do pay corporation tax, and we understand that Amazon don't. And so it makes it very hard to compete in that market." Europe's cash-strapped consumers are watching what they spend in the run up to Christmas. Tim Hunt from Ethical Consumer magazine has tips for shoppers who want to put their principals first. SOUNDBITE: Tim Hunt, Researcher, Ethical Consumer magazine, saying (English): "The advice is to shop around. We've got a list of companies on the website who are paying a more reasonable rate of tax, shall we say. Companies such as Lush and the John Lewis Partnership." More protests are planned to take place outside Starbucks stores on Saturday. And as public opinion gathers pace against corporate tax avoidance, the likes of Google and Amazon may find the cost to their reputation is too much to bear.