Rolls-Royce, one of Britain's most famous companies, has been unveiled as the latest major firm to avoid paying corporation tax in the UK.

The jet engine builder's annual report revealed it did not pay the tax in 2012, putting it among a growing list of tax-avoiding firms including Starbucks, Amazon and Google.

Rolls-Royce, which employs about 1600 people in Scotland at plants in East Kilbride and Inchinnan, near Glasgow Airport, reported a record year for profits but paid nothing to the Treasury for the second year in a row and received £3 million in credit.

It said most of its sales were abroad and its tax liability was reduced because of its investment in research, but MPs argued all companies had an obligation to pay tax if they were making a profit.

Chris Williamson, Labour MP for Derby North, where the firm has a factory, said: "We do need to get to the bottom of the story. All firms, irrespective of how many people they employ, have an obligation to pay tax if they are making profits here.

"We have to remember that successful companies in the UK are successful partly because of the investment that's made in public services, in education, in infrastructure to enable them to flourish."

Rolls-Royce's annual financial statement showed it made £1.4 billion in pre-tax profit in 2012. The firm paid £218m in taxes abroad.