Asda lifts profits but cuts its everyday tax bill

Asda boosted its profits by an impressive 23 per cent last year although the supermarket managed to see its tax bill fall thanks to a complicated web of subsidiary companies and royalty payments to its US parent, Wal-Mart.

The UK’s second-biggest supermarket saw pre-tax profits jump 23 per cent to £913.8m for the 12 months to the end of December, according to accounts filed at Companies House. Sales rose 2.1 per cent to £23.3bn, while its tax bill fell 4.1 per cent from £157.5m to £150.9m.

The tax bill was legally reduced by a £62.9m share options payment and £132.3m handed over to Asda’s US owners for technical assistance, services and royalties.

The accounts also reveal that the highest-paid director – thought to be chief executive Andy Clarke – got £1.77m last year, which was down 2 per cent on 2012.

By comparison, former Tesco boss Phil Clarke took home £1.63m in 2013 and former Sainsbury’s boss Justin King was paid £3.95m, including long-term shares and bonuses.

The company said it planned to spend £1.25bn over the next five years to improve the quality of its food and keep its prices down as part of a price war being waged between the big supermarkets and the discounters Aldi and Lidl.