Revealed: Britain’s worst tax scrooges
Almost 1 in 5 of the biggest firms paid NOTHING last year – and, incredibly, 5 even got a handout from the taxman
ALMOST one in five of Britain’s biggest listed companies paid not a penny of corporation tax in the UK last year, it can be revealed.
The Mail on Sunday has managed to obtain the details of the tax paid by 69 of the FTSE 100 group of largest companies on the stock market – many of which do not publish these figures in their annual reports.
The remaining 31 refused or failed to respond to repeated requests to disclose their tax payments.
Where details could be obtained, 13 firms – equivalent to one in five of the 69 that came clean – either paid no corporation tax in Britain or received a tax credit from HM Revenue & Customs.
The list includes household names such as BP, Royal Mail and British Gas owner Centrica.
Usually firms pay corporation tax of 19 per cent of their total profits.
BP made £5.6 billion in profit last year – yet still received tax credits worth £134 million. That meant it paid no corporation tax towards the cost of running the country where its shares are listed.
Some firms are even paying their chief executives more than they pay in tax. Royal Mail boss Rico Back stands to earn £1.8 million this year on top of a £5.8 million ‘golden hello’ for joining the company.
This payment might appear unremarkable given that the company, which was privatised in 2013, made £39 million profit in the UK last year and £212 million globally.
But it can now be revealed its UK profit was only possible thanks to a huge tax credit of £93 million – the second largest in our survey – of which £78 million was attributed to a pension ‘accounting adjustment’.
The findings will raise concerns big businesses are failing to pay their fair share towards schools, hospitals and UK infrastructure.
None of the companies assessed by The Mail on Sunday is accused of acting illegally, but most have used UK tax laws to reduce their payments from the amount they might have been expected to pay.These rules allow firms to use opaque schemes and loans to move money from one jurisdiction to another, they do not have to declare what they have done and so many of the methods to slash tax bills remain secret.
The Mail on Sunday’s Fair Play on Tax campaign has called for a level playing field – including spelling out how much revenue and profit they make in each country they operate – so that UK firms which pay their dues can more easily compete with multinational giants.
Last ni ght, Dame Margaret Hodge, formerly chair of the Commons Public Accounts Committee, said: ‘Tax avoidance by large cor- porations is a blight on this country. It means there is less money for our underfunded public services.
‘This shocking revelation by The Mail on Sunday shows the Government is still failing to get to grips with this scandal. The fact that some companies pay no corporation tax but grab our taxpayers’ money through tax credits beggars belief.’ BP and Centrica’s tax credits are understood to relate to their offshore oil and gas rigs. Centrica’s annual report says it ‘received a cash refund of tax overpaid in periods prior to 2015’. BP boss Bob Dudley was paid more than £10 million last year.
A BP spokesman said: ‘We have recently completed one of our highest ever investment programmes in the North Sea – the key driver in our tax-paying position in the UK.’
Mining firms were prominent among the 13 companies which pay no tax. Several said there is no reason for them to pay tax in Britain, as their operations are overseas and their profits generated there.
Copper miner Antofagasta said all its mines are in Chile, so it paid 99.9 per cent of its taxes there.
Fresnillo, one of the world’s biggest producers of gold and silver, has its operations in Mexico and that is where it pays tax. Evraz, a mining and steel giant part-owned by Roman Abramovich, did not want to comment.
Randgold Resources, which mines gold in Africa, is based in the Channel Islands and pays no tax in Britain. Chief executive Mark Bristow received over £7 million last year. A spokeswoman said :‘ Rand gold Resources is not incorporated in the UK and the Randgold Group has no substantial UK presence and no operations in the UK.’ She added that their London office’s accounting numbers and tax are ‘immaterial within the larger group and have therefore not warranted any separate disclosure.’
But Alex Cobham, of the Tax Justice Network, says even if the mines are abroad, often there is a significant UK management presence.
Two real estate investment trusts (REITs), British Land and Segro, paid no tax last year. REITs are funds which enable investors to put money into commercial property. If they return 90 per cent of profits to investors no corporation tax is due.
British Land, whose assets include Meadowhall shopping mall in Sheffield, received a £ 6 million tax credit last year, which it said came from overpayment in prior years.
The Government offers tax breaks for investment in research and development. A spokesman for AstraZeneca, a global pharmaceuticals titan which made £1.7 billion profit last year, said: ‘Investments in research and development during previous years and continuing into 2018 have resulted in a lower UK profit and there was no [UK corporation] tax paid in 2018.’
A spokesman for Ocado said the firm has ‘ historically made tax losses’, so no tax was due. Liverpool FC shirt sponsors Standard Chartered bank, which made £1.8 billion profit last year, said of its £12 million tax credit: ‘It’s a refund on previous years’ overpayment.’