Mcdon­ald’s UK pays £132m to Lux­em­bourg

The Sunday Telegraph - Money & Business - - Business - By James Tit­comb

MCDON­ALD’S British op­er­a­tion paid £132m in “fran­chise rights” last year un­der a con­tro­ver­sial struc­ture that al­legedly lim­its its bill to the Ex­che­quer.

The pay­ments are be­lieved to go to the fast food gi­ant’s Lux­em­bourg op­er­a­tion, whose tax pay­ments are cur­rently un­der in­ves­ti­ga­tion by the Euro­pean Com­mis­sion.

Mcdon­ald’s has his­tor­i­cally pooled roy­alty fees from around Europe at a com­pany in Lux­em­bourg, at a cost of hun­dreds of mil­lions of pounds to the UK op­er­a­tion. Last year, amid EU scru­tiny over its sit­u­a­tion in the tiny Duchy, it said it would move its base for nonus rev­enues to the UK.

Ac­counts for 2016, filed by Mcdon­ald’s Restau­rants Lim­ited at Com­pa­nies House, are be­lieved to rep­re­sent the last year un­der the old struc­ture. They show fran­chise pay­ments ris­ing from £122.7m to £132.2m.

This cut op­er­at­ing profit for the year by al­most a third on what it would have been with­out the fran­chise pay­ments.

Mcdon­ald’s Restau­rants Lim­ited posted a 6pc rise in pre-tax profits to £287.5m in 2016 on the back of a 2.5pc rise in rev­enue to £1.57bn. It did not re­spond to re­quests for com­ment in re­la­tion to the fran­chise rights fees.

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