Taxing times for Kellogg’s

KELLOGG’S was last night urged to come clean over its tax arrangements after it emerged it effectively paid no corporation tax in Britain in 2013, writes Hugo Duncan.

Tax experts said the complex web of companies it uses to do business in the UK generates ‘significant opacity’ which makes it hard to tell if it is paying its fair share of tax in this country.

Kellogg’s was accused of acting like ‘ a classic US-owned IT company’ with bases in ireland and Luxembourg rather than as a food manufacturer known around the world for its cereals.

American tech firms such as Google, Apple and Amazon have been heavily criticised in recent years over alleged tax avoidance.

Kellogg’s has three factories in Britain – two in Wrexham and the third in manchester – where it makes cereals and snacks.

it sells in the UK through two main subsidiaries owned by irish- based Kellogg Europe Trading Ltd.

The two subsidiaries paid corporation tax of £8.4m on profits of nearly £50m in 2013. it also has six Luxembourgregistered companies which paid corporation tax of £210,000 on profits of about £57m.

But the £210,000 and £8.4m figures were offset by an £11.8m tax credit at another UK registered operation, Kellogg Group.

Richard murphy, of Tax Research UK, said: ‘i think it fair to say that Kellogg’s is structured very much like a classic US IT company – with ireland as a hub for supply chain management and Luxembourg for managing financial structuring in inward investment.

‘That can only be explained by a tax avoidance motive.’

A Kellogg’s spokesman said: ‘ We are a responsible taxpayer.’