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Tesco’s tax: Every penny counts?

080608_tesco.jpgFollowing Tesco’s recent legal wrangle with the Guardian over allegations of corporation tax avoidance, the retailer’s tax affairs have one again hit the headlines. It turns out that the retailer is engaging in corporation tax avoidance schemes, after all. Private Eye has uncovered what it terms as “another complex web of offshore operations” which features a Tesco owned UK LLP with branches in Hungary, the Irish Republic and Zug, where corporation tax is only 6%. The structure is believed to have deferred, if not saved the retailer millions in UK taxes. Tesco denies any wrong doing, it says that the unusual set-up is designed to fund its overseas businesses, and is just “financial planning” which is compliant with the UK’s controlled foreign companies (CFC) legislation. It points out that it is one of the UK’s largest taxpayers. Tax expert and regular contributor Simon Sweetman points out that “Given the scale of its profits, it would be astonishing if it were not. It also manages to include its payments of PAYE and NIC which are not of course burdens that it bears: it merely acts as a collector here.” Image source: > Continue.

News selected by Covalence | Country: UK | Company: Tesco | Source: Accounting Web

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