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Danny Alexander warns firms who use legal tax avoiding schemes that payment is an 'obligation' not an 'option'


Multinational firms who use tax havens and other legal tax avoiding devices were told today that paying tax is not an “option” like putting money on a collection plate, but an “obligation”.

The Chief Secretary to the Treasury, Danny Alexander, was referring to the decision by Starbucks to donate of £20 million to HMRC after being criticised by a Commons committee over its tax arrangements.

"Taxation for big companies, or for anyone in society, can't be, and mustn't be, a voluntary arrangement," Mr Alexander told the BBC’s Andrew Marr show.

"Thinking of the tax system as if it is like the church plate going around on a Sunday morning is completely the wrong way to think about it. Paying tax is not a voluntary choice, it is not something you can just chose to do willy nilly because you think it will please your customers, it is an obligation.”

It was revealed that Starbucks has paid £8.6 million in corporation tax during the 14 years of trading in the UK, and has paid none in the past three years. Though sales have come to more than £400 million, the company’s books show that they have made a profit only once. They have now said they will pay £10 million a year for the next two years.

London’s Mayor, Boris Johnson, defended company accounts who look for ways to minimise their companies’ tax bills. "Now that Starbucks has announced they are going to be making this payment I think rather than everybody sneering at them people should welcome that," he told Sky News.

But the offer was dismissed as a “stunt” by the pressure group UK Uncut, who staged demonstrations at Starbucks outlets across the UK at the weekend.

Other global firms, including Amazon and Google, have also been criticised for avoiding UK tax.

Today the Sunday times alleged that Microsoft has been using a legal loophole to avoid paying UK tax on £1.7 billion of online sales of Windows 8 by funnelling the proceeds through Luxembourg.