Financial News

  • 5 December 2012, 12:28

Thomson Owner Paid 'Little' UK Corporation Tax

Tui Travel paid just £1.1m corporation tax in the UK over the last year, despite a hike of almost 40% in statutory profit.

The boss of the British company, which owns Thomson and First Choice among others, told Sky News the low figure was a result of restructuring at the company. 

"Within the UK, because we have accumulated tax losses as a result of restructuring the business, there's little or no tax being paid in the UK," he said.

"But that's as a consequence of these carried forward losses that we have.

"Once those losses have been utilised, then we will pay tax in the normal way as we comply with all the laws of the lands that we operate in."

The losses were incurred as a result of 2010's ash cloud - which caused huge problems to the travel industry - and have been brought forward, offsetting the company's taxable profits in the UK.

"This is fully compliant with UK tax law, perfectly legitimate and normal practice," a Tui Travel spokesperson said. 

The comments came as the company reported a rise in statutory profit before tax for the year to the end of September 30 to £201m, compared with £144m the previous year.

The underlying performance of the business - when one-off items are not included - also performed well, with pre-tax profit up 8% to £390m.

Bookings were up across Britain, Germany and Nordic countries, but fell 28% in France as the company reduced capacity in the country.

Mr Long described the year as "one of many successes".

"We have delivered record Group profits while the UK achieved outstanding results both in terms of profit and margin all against a backdrop of continued economic uncertainty," he said.

"Our proven strategy continues to evolve and drive strong trading momentum throughout the group."

He added that, with the exception of France, trading for both winter 2012/13 and summer 2013 was encouraging.

Last week, Tui Travel's rival Thomas Cook said its turnaround plan had taken its toll, causing deeper losses.

The 171-year-old company reported a statutory loss of £590m for the 12 months to the end of September - worse than the £518m loss recorded the previous year. 

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