Executives from some of the world's most-recognised firms have been grilled by MPs on the issue of tax avoidance.

The head of Google UK and top managers from Starbucks and Amazon appeared before the Public Accounts Committee.

Starbucks admitted the Dutch government had granted a special tax deal on its European headquarters, which receives royalty payments from its UK business.

Amazon and Google also confirmed they used favourable European tax jurisdictions for their UK businesses.

Amazon's sales are handled out of Luxembourg, while Google's advertising space is sold by a team in the Republic of Ireland, the executives confirmed.