The US company that owns Cadbury UK is still not paying corporate tax in Britain, it has emerged.
Mondelez International, formerly known as Kraft Foods, has lawfully avoided paying tens of millions of pounds in corporation tax since it acquired the chocolate manufacturer for £11.5bn five years ago, a Sunday Times investigation revealed.
It also cut 200 jobs from its UK workforce once the controversial takeover went through, despite protests by workers from the Bournville factory in Birmingham.
Cadbury UK made £96.5m in profit in the year to December 31, 2014, but has paid no corporation tax since 2010. According to the Financial Times, the Birmingham-born chocolate manufacturer paid an average of £6.4m a year in the decade prior to the takeover.
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The company reportedly used a “tax-efficient structure put in place” to erase their UK tax bills by using interest payments on an unsecured £8.2bn debt. The debt is listed as a bond on stock exchanges in the Channel Islands.
According to the newspaper, the interest payment then creates tax losses to offset profits elsewhere in the group, and are routed tax-free out of the UK using the “quoted Eurobond exemption” provided for such bonds.
Lindsay Hoyle, an MP on the House of Commons business, innovation and skills committee that investigated the takeover in 2010, told the Sunday Times: “It’s wrong that companies like these hide behind an international tax system at the expense of loyal British companies who pay their tax.”
Some have taken to social media to complain about the company's tax-avoiding activities:
Mondelez International said in a statement: “In common with all global businesses, we pay corporation tax based on the laws of the countries in which we operate. We comply with all applicable tax legislation in the UK, working closely with the relevant authorities, and on a global basis we pay hundreds of millions of dollars in corporate income tax annually.
“Since 2010 we are very proud to have invested over £200m into the UK across our world leading innovation, science and manufacturing sites and our 4,500 UK employees.”Reuse content