Coffee chain Starbucks has paid corporation tax in the UK for the first time since 2008, the company has announced.
The firm's cafes are a familiar sight on streets across the country but Starbucks told MPs last year it had made a loss for 14 of the 15 years it has operated in the UK, achieving just a small profit in 2006.
But under pressure from politicians and the public the firm committed to pay £20 million in corporation tax over two years and the Exchequer has now received the first £5 million.
A Starbucks spokeswoman said: "Six months ago, we felt that our customers should not have to wait for us to become profitable before we started paying UK corporation tax.
"We listened to our customers in December and so decided to forgo certain deductions which would make us liable to pay £10 million in corporation tax this year and a further £10 million in 2014.
"We have now paid £5 million and will pay the remaining £5 million later this year.
"We are also undertaking measures to make Starbucks profitable in the UK, such as relocating unprofitable stores to more cost effective locations, closing them where that is not possible and placing greater reliance on franchised and licensed stores."
In a fiery showdown with the Commons' Public Accounts Committee last year Starbucks insisted it was ''an extremely high taxpayer'' globally and acted ''to an ethical'' as well as a legal standard, despite declaring losses on its UK operation.
Its global chief financial officer Troy Alstead blamed an over-aggressive entry to the UK market which had left it with expensive properties that did not make money.
''It is fundamentally true, everything we are saying and everything we have said historically,'' he told the committee and said it remained committed to making profits here.
He conceded that a tax deal struck with the Dutch authorities - that he declined to detail - was ''an attractive reason'' for basing the coffee company's operations there.
A chunk of UK branch profits - 6% reduced to 4.7% in what one MP called a "cosmetic'' deal with HMRC - is transferred there as a dividend, meaning there is no profit to declare.
It also charges a 20% mark-up on coffee which it buys via Switzerland where it pays 12% tax.
''Respectfully, I can assure you there is no tax avoidance here,'' he told MPs.
''We have a global tax rate of 33% around the world. Our tax rate outside the US is 21%. That is higher than most multinationals' global rate. We are an extremely high tax payer.''
He added: ''We do not manipulate anything, anywhere.''
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article