F1 pays just £7m in tax

FORMULA 1 paid just £6.9million in tax last year despite having underlying profits of £350million on turnover of £1.4 billion.

The revenues are booked at UK companies – based at F1’s headquarters opposite Hyde Park in Central London – which have huge loans from offshore businesses.

The loans are in turn provided by the sport’s American owner, investment firm Liberty Media.

The interest is used to reduce the profits for tax purposes under an agreement struck with Revenue & Customs in 2008.

New rules are due to be introduced in Britain to restrict the amount of interest companies can use to reduce their corporation tax bills as part of an international crackdown. Shareholder loans will soon cease to generate tax relief.