Alliance Boots defended its registration in the low-tax Swiss canton of Zug as it prepared for nationwide protests against tax avoidance, telling Tax Journal today that if it had registered in Switzerland ‘purely for tax reasons’ there were many other countries that it could have considered.
UK Uncut, the protest group, declared that its ‘Big Society Revenue and Customs’ will ‘double up as the Big Society Health Service’ on Sunday, and ‘show Boots what their avoided tax could be spent on' by setting up ‘hospitals’ in Boots stores. ‘We’ll be educating the public on the issues of tax avoidance (legal but morally questionable), and the government's plans for the NHS (not put to the electorate, and widely criticised as being dangerous),’ the group announced.
An Alliance Boots spokesperson told Tax Journal that the Boots business in the UK has been a member of the wider group Alliance Boots since 2006. ‘The new holding company, Alliance Boots GmbH, was established in Switzerland shortly after the group was taken private. We decided to establish this new holding company in Switzerland because in the longer-term we believe it will better reflect the increasingly international nature of our wider group.
'If we had registered in Switzerland purely for tax reasons there are many other countries that we could have considered,’ she said.
UK Uncut is promoting ‘direct action’ against public spending cuts, and ‘actions’ are planned in 30 UK towns and cities for Sunday, 30 January. In a blog post earlier this week, the organisers of a protest at the company’s Oxford Street stores claimed that Boots ‘was bought out by foreign investors, loaded with debt, and moved headquarters to a Swiss tax haven’.
Quoting an article that appeared in The Guardian last month, False Economy, a campaign backed by the TUC and Unison, said on its website: ‘After huge interest payments, its worldwide profits last year were £475 million. It is hard to see which parts of the company are now making what, but the cash flow statement for the year to March 2010 shows that just £14 million was recorded as the tax charge on those profits – that is, just 3% of profits.’
The Alliance Boots group’s accounts indicate that the tax charge for the year was reduced by significant adjustments in respect of earlier years. The group reported profits of £475 million before tax, and a tax credit of £129 million (comprising an underlying tax charge of £9 million offset by tax credits of £138 million) for the year to 31 March 2010.
The annual report reads: ‘The underlying tax charge of £9 million included a prior year tax credit of £47 million arising from the favourable resolution of prior year tax computations, a deferred tax credit of £40 million due to internal restructuring of the ownership of an associate (enabling the Group to control the timing of future dividends which give rise to withholding tax costs) and a prior year deferred tax credit of £33 million primarily resulting from tax revisions in the estimated valuations of tax base costs of the Group’s property assets. Tax paid [during the year] was £14 million.’
The Alliance Boots spokesperson added that around three quarters of the group’s capital expenditure has gone into Boots in the UK over the last three years. ‘We have also increased employment in our stores and made larger national insurance contributions as a result,’ she said.
‘The Boots business in the UK continues to have its headquarters in Nottingham, where it has been deeply rooted since it was first established in 1849. This commitment to developing the business is reflected in the fact that Alliance Boots has not been paying any dividends to its shareholders since 2007 and its focus has been, and will remain, on investing in its businesses going forward.’
Alliance Boots defended its registration in the low-tax Swiss canton of Zug as it prepared for nationwide protests against tax avoidance, telling Tax Journal today that if it had registered in Switzerland ‘purely for tax reasons’ there were many other countries that it could have considered.
UK Uncut, the protest group, declared that its ‘Big Society Revenue and Customs’ will ‘double up as the Big Society Health Service’ on Sunday, and ‘show Boots what their avoided tax could be spent on' by setting up ‘hospitals’ in Boots stores. ‘We’ll be educating the public on the issues of tax avoidance (legal but morally questionable), and the government's plans for the NHS (not put to the electorate, and widely criticised as being dangerous),’ the group announced.
An Alliance Boots spokesperson told Tax Journal that the Boots business in the UK has been a member of the wider group Alliance Boots since 2006. ‘The new holding company, Alliance Boots GmbH, was established in Switzerland shortly after the group was taken private. We decided to establish this new holding company in Switzerland because in the longer-term we believe it will better reflect the increasingly international nature of our wider group.
'If we had registered in Switzerland purely for tax reasons there are many other countries that we could have considered,’ she said.
UK Uncut is promoting ‘direct action’ against public spending cuts, and ‘actions’ are planned in 30 UK towns and cities for Sunday, 30 January. In a blog post earlier this week, the organisers of a protest at the company’s Oxford Street stores claimed that Boots ‘was bought out by foreign investors, loaded with debt, and moved headquarters to a Swiss tax haven’.
Quoting an article that appeared in The Guardian last month, False Economy, a campaign backed by the TUC and Unison, said on its website: ‘After huge interest payments, its worldwide profits last year were £475 million. It is hard to see which parts of the company are now making what, but the cash flow statement for the year to March 2010 shows that just £14 million was recorded as the tax charge on those profits – that is, just 3% of profits.’
The Alliance Boots group’s accounts indicate that the tax charge for the year was reduced by significant adjustments in respect of earlier years. The group reported profits of £475 million before tax, and a tax credit of £129 million (comprising an underlying tax charge of £9 million offset by tax credits of £138 million) for the year to 31 March 2010.
The annual report reads: ‘The underlying tax charge of £9 million included a prior year tax credit of £47 million arising from the favourable resolution of prior year tax computations, a deferred tax credit of £40 million due to internal restructuring of the ownership of an associate (enabling the Group to control the timing of future dividends which give rise to withholding tax costs) and a prior year deferred tax credit of £33 million primarily resulting from tax revisions in the estimated valuations of tax base costs of the Group’s property assets. Tax paid [during the year] was £14 million.’
The Alliance Boots spokesperson added that around three quarters of the group’s capital expenditure has gone into Boots in the UK over the last three years. ‘We have also increased employment in our stores and made larger national insurance contributions as a result,’ she said.
‘The Boots business in the UK continues to have its headquarters in Nottingham, where it has been deeply rooted since it was first established in 1849. This commitment to developing the business is reflected in the fact that Alliance Boots has not been paying any dividends to its shareholders since 2007 and its focus has been, and will remain, on investing in its businesses going forward.’
