Starbucks offers to pay more corporation tax

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A Starbucks shop in Nottingham
A Starbucks shop in Nottingham Photo: Press Assocation

Starbucks wasn't breaking the law but it's clear they felt they had to do something about the increasing controversy over its tax affairs.

They don't just trade on their coffee, they also trade on their reputation and the boss told me this afternoon, customers had started saying to him, 'hang on this isn't fair'.

His worry, that they'd start staying away, denting not just the firm's reputation but also its bottom line.

The trouble with this is that technically they can't just pay extra now because they now feel like it.

They are saying they will pay £20 million of tax on profits in the next couple of years. That might happen naturally if they make the changes to their accounts as they've promised to do and start making profits.

But the really odd thing thing is they're saying they will pay tax on profits - even if there are no profits to tax. Strange? Well it is not just unprecedented (as far as I can find tonight), it might not even be possible.

A Starbucks shop in London
A Starbucks shop in London Credit: Johnny Green/PA Wire

Starbucks admitted to me they might end up having to just make a donation if the deal with the taxman can't be done. As HMRC told me tonight corporation tax is 'not voluntary.'

The danger for Starbucks is that if they end up just making a donation, far from making them seem like they're paying their fair share, it could just reinforce the idea that big multi-national companies are in a position to dictate terms. In contrast to most of us, who have no choice about how and when we're going to pay the taxman.

Tonight - neither Amazon or Google, whose tax affairs were also branded 'immoral' by MPs, are budging on their tax affairs.

Kris Engskov - Managing Director of Starbucks extended interview