Starbucks is volunteering to pay £10m in taxes in each of the next two years as it attempts to win back customers following revelations that it has paid no corporation tax in the UK in the past three years.
Kris Engskov, managing director of Starbucks UK, said he was surprised by the public outcry at the company's use of complex tax arrangements and vowed to make the payments to HM Revenue and Customs for two years even if the coffee chain failed to make a profit.
However, politicians and tax experts said the unilateral decision, which Engskov said he had not discussed with HMRC, made a mockery of the tax system, while the tax authorities reaffirmed the position that corporation tax is not voluntary.
The unprecedented announcement was made at the London Chamber of Commerce, where Engskov said: "I am announcing changes which will results in Starbucks paying higher corporation tax in the UK – above what is currently required by law.
"Specifically, in 2013 and 2014 Starbucks will not claim tax deductions for royalties or payments related to our intercompany charges.
"In addition, we are making a commitment that we will propose to pay a significant amount of corporation tax during 2013 and 2014 regardless of whether our company is profitable during these years.
"These decisions are the right things for us to do. We've heard that loud and clear from our customers."
Although he said the tax authorities were unaware of the company's plans, he added they had been in negotiations