Starbucks says conversation with UK officials ‘routine’
Company categorically denies threatening to withhold UK investment
By CFOWorld.co.uk staff | CFO UK | Published 10:55, 28 January 13
Global coffee chain Starbucks has said its meeting with UK officials on Friday was routine and "long-scheduled" and not an urgent one sought in connection with the public criticism it has faced in recent months over its tax affairs.
The company also categorically denied having threatened to withhold UK investment. Last week, at the World Economic Forum in Davos, UK Prime Minister David Cameron said tax avoiders "need to wake up and smell the coffee" interpreted by many as a warning shot to Starbucks. New reports on Sunday suggested Starbucks was worried it was being deliberately targeted as Kris Engskov, its UK managing director, met government officials.
However, dismissing the reports, Starbucks said, "While, we do not discuss the details of our government meetings but can say that we do not recognise how it has been reported. Starbucks agrees with the Prime Minister that all businesses should pay their fair share."
The company said it employed 9,000 people in the UK and contributed £300 million a year to the country's economy. "We are forgoing tax deductions that will make the Exchequer at least £20 million better off," it added.
Separately, Conservative party Chairman Grant Shapps said no single company was being cornered by the government or the Conservative Party but that all corporations need to pay "their fair share" of tax.
Speaking to Sky News on Sunday, Shapps said, "I don't think we would ever single out a single company, but I do think companies in this country need to pay their way. I think they need to do what's right as far as that is concerned and I think most people watching this would agree, companies should pay their fair share of taxation."
"That applies to that company and anyone else you care to mention. It certainly applies to millions of smaller businesses in this country," he added.
In November 2012, a committee of MPs accused Starbucks along with Google, Amazon and several other multinational corporations of “immoral” tax avoidance. Subsequently, the government announced a campaign against "tax dodgers" to get back a potential £2 billion a year in lost taxation.
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