Financial News
- 28 November 2012, 14:28
Morrisons Boss Slams Foreign Rivals Over Tax
Britain's fourth largest supermarket chain has called for the Chancellor to make changes to corporation tax rules to prevent foreign multinationals gaining an unfair competitive advantage.
Morrisons finance director Richard Pennycook told Jeff Randall Live that it is time companies came clean on tax and that tax attached to economic activity in the UK should stay here.
Mr Pennycook told Randall: "We want a level playing field.
"What applies to one company should apply to another. There are big differentials in what companies are paying."
The comments from Morrisons' top finance man come as the furore spreads over tax rates paid by foreign multinationals operating in Britain.
Mr Pennycook told Randall: "The Chancellor must look into this and regulate.
"Taxes on activity here in the UK should stay here. Transparency is very important."
Morrisons has a 12% share of the UK supermarket trade and paid £281m - more than a quarter of its profits - in corporation tax last year.
In contrast discount supermarket chain Lidl - which was founded in Germany - is privately-owned and operates 580 stores and a market share of 2.5%.
Approached by Sky News, Lidl declined to reveal its tax rate but said: "Lidl do not engage in any tax avoidance schemes nor do we have any subsidiaries in 'low tax' countries.
"At Lidl, we believe that every company operating in the UK has a social and economic responsibility to pay corporation tax.
"As a private company, we are under no obligation to release any financial statistics and as routine do not do so, however Lidl UK has paid its fair share of corporation tax in line with UK laws."
Sky News has confirmed that budget chain Aldi, with a 3% market share, paid £12.7m in UK corporation tax last year, on a profit of £70.5m.
Asda, which is owned by the US-based retail giant Walmart, has 17.6% share and paid £163m in tax.
Meanwhile the UK-based leader Tesco, with 31% of the market, paid £694m in tax in 2011.
And Sainsbury's, which maintains 16.4% of the UK market - paid tax of £201m.
Google, Amazon and Starbucks have all been criticised recently for low rates of tax paid in the UK.
what do you think?
t.bulgin
Morrisons treat there employees like dirt. They only care about profits. Don't be fooled.
blue side
t.bulgin I agree think this is more about jumping on the band wagon maybe he can explain their extraordinary mark ups
bjnk
I agree they are jumping on the band wagon,but many large companies must feel agreaved,possibly that they dont get away with it. Considering they only have 12% share of the market they have paid alot more into our system than ASDA, work that one out.
Ian Watson
When MP's sit as non exec members of the company boards that are avoiding paying taxes in Britain then please don't expect them to vote for changes to taxation law. Big corporations have a vested interest in not paying their proper share of taxation in the countries where they make vast profits. The burden then falls upon the shoulders of the ordinary working man in the street to support gorvenment finances through the large % of tax per income.
peter
Its not the likes of Supermarkets that HMRC should chase - Its the footballers and pop stars etc... They make themselves into "Companies" and offset all expenses calling them 'business expenses', such as cost of houses, rates, telehones, cars, cleaning staff, accountants, wages for family members, pensions, business holidays, travelling expenses etc etc....and they then pay Corporation tax instead of Income Tax on the remainder which can be made very small -
Peter Edwardson
Sour grapes perhaps? Just because the foreign firms have smarter management.
shirley sutton
8:07pm on 27/11/2012
i can understand their frustration when the likes of Aldi are paying hardly any tax in comparison to the british supermarkets - we get ripped off by all the foreign companies, lets see if the government have the balls to do anything about and close the loop hole or are they scared they'll upset the yanks and the germans
blue side
7:57am on 28/11/2012
Shirley there are many issues which you have not thought through like the tax these companies do pay I suggest you have look at Starbucks blog. Corporation tax needs lowering in this country which has a double effect starting with encouraging foreign firms and including those trading here registering here. The hysteria over the tax is very much a political hype.
blue side
7:58am on 28/11/2012
Also I understand Aldi pay more than Morrisons