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Furore Costas Starbucks

Global coffee chain Starbucks faces being out of pocket after its low corporation tax habits were uncovered and the business was prompted by ensuing bad publicity into vowing to pay up to £20m to HMRC over the next two years, regardless of profits.

As the purveyor of gingerbread lattes and peppermint mochas licks its wounds, there is celebration among one of its biggest competitors in the UK. Costa Coffee owner Whitbread said its sales grew last week as ticked-off, tax-paying customers appeared to transfer their allegiances out of disappointment in the Seattle-based firm.

Andy Harrison of parent company Whitbread said, tongue-in-cheek: "We have been the UK's favourite coffee shop for some time - we remain the taxman's favourite coffee shop too."

Sales at Costa Coffee have also grown 7.1% in the last three months, just as the furore over the accounting manoeuvres of multi-nationals began to mount.

Starbucks will hope that its tax move will work or it faces being stuck in second place to Costa Coffee.

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