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Tax avoidance: Osborne to increase investigators' funds Tax: Starbucks in talks with UK's Revenue and Customs
(34 minutes later)
Chancellor George Osborne has pledged more funds for the UK authorities to tackle tax avoidance by multinationals. Global coffee chain Starbucks has said it is in talks with HM Revenue and Customs and the Treasury over how much UK tax it pays.
He told the BBC that an announcement would be made on Monday about the "extra investment" for the Inland Revenue to deal with the issue. It is one of several well-known firms that were criticised over the level of their corporation tax payments.
It comes as Starbucks said it was in talks with HM Revenue and Customs about how much tax it pays. The firm admitted that it "needed to do more" in the UK on tax.
Big-name firms including Starbucks have been criticised after it emerged they pay little or no UK corporation tax. Meanwhile, Chancellor George Osborne has pledged more funds for the British authorities to tackle tax avoidance by multinationals.
A Public Accounts Committee report on the issue of how much tax multinational firms pay in the UK is due on Monday. He told the BBC that an announcement would be made on Monday about the " extra investment in the part of the Inland Revenue that tackles tax avoidance by multinational companies".
A Public Accounts Committee report on the topic of how much tax multinational firms pay in the UK is due on Monday.
In November the committee took evidence from executives from Starbucks, Google and Amazon over the amount of tax the companies have paid in the UK.
'Competitive'
"We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more," said a Starbucks statement."We have listened to feedback from our customers and employees, and understand that to maintain and further build public trust we need to do more," said a Starbucks statement.
"As part of this we are looking at our tax approach in the UK. The company has been in discussions with HMRC for some time and is also in talks with The Treasury.""As part of this we are looking at our tax approach in the UK. The company has been in discussions with HMRC for some time and is also in talks with The Treasury."
It said more details would be released later this week.It said more details would be released later this week.
BBC business correspondent Theo Leggett said the coffee company reported sales of nearly £400m in the UK last year, but paid no corporation tax at all.
"Much of the money it earns in this country is transferred to a sister company in the Netherlands in the form of royalty payments, leaving the UK division to report regular annual losses," he added.
Mr Osborne did not single out any firms while making his announcement on the Andrew Marr Show.Mr Osborne did not single out any firms while making his announcement on the Andrew Marr Show.
He also said that as well as his extra funding for the UK authorities, it was also necessary to work at an international level on the issue.He also said that as well as his extra funding for the UK authorities, it was also necessary to work at an international level on the issue.
"It is actually Britain who has been working with Germany and France to get those rules on the international table," he said."It is actually Britain who has been working with Germany and France to get those rules on the international table," he said.
But he also warned against "pricing Britain out of the world economy.", adding that "if we make our taxes less competitive that will just mean more companies stay out of Britain". But he also warned against "pricing Britain out of the world economy", adding that "if we make our taxes less competitive that will just mean more companies stay out of Britain".
The PAC report is expected to be critical of the current way in which multinational firms used UK tax legislation. Monday's PAC report is expected to be critical of the current way in which multinational firms used UK tax legislation.
In November the committee took evidence from executives from Starbucks, Google and Amazon over the amount of tax the companies have paid in the UK. After last month's hearings, PAC chair Margaret Hodge MP said: "One of our concerns is that the ability of global companies to choose where to they put their costs and their profits gives them an unfair tax advantage that damages UK-based businesses,"
After the hearings, PAC chair Margaret Hodge MP said: "One of our concerns is that the ability of global companies to choose where to they put their costs and their profits gives them an unfair tax advantage that damages UK-based businesses,"