Starbucks promises to pay more taxes in U.K.

LONDON — Starbucks bowed to mounting pressure over its tax affairs in Britain and revealed Thursday that it would pay about $16 million in each of the next two years.

Having been slammed by the country’s lawmakers of “immorally” avoiding tax, Starbucks’ U.K. managing director Kris Engskov said the firm had agreed to pay more than required by law.

“With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more,” he told the London Chamber of Commerce.

The Seattle-based coffee company has 700 British outlets, but has paid just $13.8 million in corporation tax in 14 years. Starbucks Corp. says this is due to a process involving paying royalties to its European headquarters in the Netherlands.

The company hasn’t done anything illegal. Companies operating in Europe can base themselves in any of the 27 European Union nations, allowing them to take advantage of a particular country’s low tax rates.

Earlier this week, Parliament’s Public Accounts Committee criticized multinationals such as Starbucks, Amazon and Google for “using the letter of tax laws both nationally and internationally to immorally minimize their tax obligations.”

Starbucks, which also has been the target of demonstrations by the protest group U.K. Uncut, announced this week that it was reviewing its tax approach.

Engskov said the company was proposing “to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years.”

He estimated that would amount to “somewhere in the range of 10 million pounds in each of the next two years.”

Labour lawmaker Margaret Hodge, who chaired the parliamentary committee, said Starbucks’ change of heart was proof that “people power works.”

Earlier this week, U.K. Treasury chief George Osborne earmarked an $124 million to clamp down on “offshore evasion and avoidance by wealthy individuals and by multinationals.”

More in Herald Business Journal

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Small retailers aim for emotional ties big chains may lack

“Put yourself into the community more and the money will come back to you.”

A look at what some stores have planned for Black Friday

With unemployment low, stores are hoping customers are in a mood to shop.

Boeing bolsters team for potential 797 with leading engineer

Terry Beezhold has been chief project engineer for the 777X program.

Uber paid off their hackers — they’re far from the only ones

“More and more companies have their own Bitcoin wallets for such cases.”

Airline defendants to pay $95 million in 9/11 settlement

The litigation claimed that security lapses led the planes to be hijacked in the Sept. 11 attacks.

Trump SoHo to shed ‘Trump’ amid reports of sagging business

The president’s company said it would have no comment beyond its news release announcing the move.

Uber reveals cover-up of hack affecting 57M riders, drivers

Uber acknowledges paying the hackers $100,000 to destroy the stolen information a year ago.

Mountlake Terrace-based 1st Security Bank wasn’t traded publicly during the recession, but it has seen a steady growth since the recession. (Jim Davis / HBJ)
How stocks in local banks fared since the recession

Every bank was hit hard during the recession, but most have bounced back in a big way.

Most Read