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Boots owner uses havens to avoid £1.1bn in corporation tax

boots £1.1bn corporation tax the independent uk tax avoidance havens caymen islands luxembourg gibraltar

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#1 theyarecomingforyou

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Posted 14 October 2013 - 23:37

Alliance Boots, the owner of Boots the chemist, has avoided £1.1bn in taxes by routing its cash through a series of subsidiaries in well-known tax havens including Luxembourg, Cayman Islands and Gibraltar, according to a new report.

 
The campaign groups War on Want and Change to Win and the Unite union have calculated that the company saved the money by loading the UK business with debts from its £12.2bn private purchase in 2007 and legally claiming tax relief against the interest.
 
The campaigners claim that 40 per cent of Boots’ sales come from NHS-funded services such as prescription drugs and flu jabs – and called on the Government not to hand contracts to companies that do not pay their fair share in tax. The pharmacy giant rejected the report’s findings and said it is one of the most transparent private companies in the world. Only 25 per cent of sales came from prescriptions and similar business, it added.
 
Last year, Alliance Boots’ sales hit £22.4bn with underlying profits reaching £805m. However, the company paid just £114m in tax, including £64m in the UK, up £31m on the previous year. In the UK, under the Boots brand where it has 2,000 stores, sales were £6.55bn.

Source: The Independent

 

It's absolutely outrageous that a major company like this is paying tax at a rate of just 0.5%.




#2 Sandor

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Posted 14 October 2013 - 23:40

Capitalism.



#3 McKay

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Posted 14 October 2013 - 23:51

What's outrageous is that the law permits them to do this. Is it morally wrong? Sure. Legally? Nope. 

 

Yet people and the government will bitch and moan, and do nothing to close these loopholes. 



#4 Anibal P

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Posted 14 October 2013 - 23:56

What's outrageous is that the law permits them to do this. Is it morally wrong? Sure. Legally? Nope. 

 

Yet people and the government will bitch and moan, and do nothing to close these loopholes. 

 

I know right? A lot of talk of doing something but nothing ever happens because deep down inside they know some money is better than none, so the LEGAL tax loops stay open and anyone can use them if they so choose to do so



#5 +Nik L

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Posted 15 October 2013 - 00:12

And yet it's somehow more important to further screw the average contributor rather than pursue these corporates. Who's meant to be running the damned company... Sorry I meant country.



#6 OP theyarecomingforyou

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Posted 15 October 2013 - 00:16

What's outrageous is that the law permits them to do this. Is it morally wrong? Sure. Legally? Nope. 

 

Yet people and the government will bitch and moan, and do nothing to close these loopholes. 

That's a complete cop-out, as it excuses the wrongdoings committed by these corporations. If somebody committed murder and used a loophole to avoid prosecution people wouldn't be defending the murderer or the legality of the act, they'd be baying for blood and demanding justice.

 

Of course the government bears responsibility for the current situation but the matter is complicated by the nature of international tax law. It is difficult for reforms to be made without international cooperation. What is clear is that the current system isn't fit for purpose, as large multinationals are able to pay virtually no tax and undercut domestic businesses.



#7 McKay

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Posted 15 October 2013 - 00:26

That's a complete cop-out, as it excuses the wrongdoings committed by these corporations. If somebody committed murder and used a loophole to avoid prosecution people wouldn't be defending the murderer or the legality of the act, they'd be baying for blood and demanding justice.

 

Of course the government bears responsibility for the current situation but the matter is complicated by the nature of international tax law. It is difficult for reforms to be made without international cooperation. What is clear is that the current system isn't fit for purpose, as large multinationals are able to pay virtually no tax and undercut domestic businesses.

 

 

By the letter of the law, they are doing nothing wrong. I don't think murder is a valid comparison, its too clear cut. I'm not defending their morals. But they're doing nothing illegal. Instead of everyone just moaning and doing nothing, how about the government see the loopholes these companies expose, and then fix them?



#8 OP theyarecomingforyou

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Posted 15 October 2013 - 00:39

By the letter of the law, they are doing nothing wrong. I don't think murder is a valid comparison, its too clear cut. I'm not defending their morals. But they're doing nothing illegal. Instead of everyone just moaning and doing nothing, how about the government see the loopholes these companies expose, and then fix them?

I agree that the responsibility ultimately lies with the government but I think it is perfectly justified to criticise the actions of these businesses and would argue that it is in fact necessary to do so. The public outrage at Starbucks led to the company pay corporation tax for the first time in five years. I just feel it is wrong to excuse the actions of these corporations on the basis that what they're doing isn't technically illegal.



#9 FloatingFatMan

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Posted 15 October 2013 - 07:43

UK PM David Cameron is trying to fix the loopholes, but as you say, it takes international cooperation to fix it properly.  Still, from what I understand, they're making some headway against the problem as it's not just the UK where these companies are getting away with it.

 

Until then, naming and shaming is just about the only option for dealing with these people in any half effective manner.