A British subsidiary of Cadbury’s American owner paid no tax last year, despite making a £2.1bn profit.
The accounts for Vantas International, ultimately owned by the Toblerone-to-Ritz maker Mondelez, show that £442m of income — about what it would have paid in corporation tax — was not subject to tax. Mondelez declined to elaborate on why there was no levy on the income.
Meanwhile, the company’s main operating subsidiary in this country, Mondelez UK, paid corporation tax equivalent to a rate of 0.6%.
It paid £122,000 on pre-tax profits of £22m. If the subsidiary had paid the standard rate of 20%, the bill would have been £4.4m. It lawfully avoided paying the tax thanks to “compensating interest deductions” of £11.9m during the year.
On that second, “lawfully avoided” is a hell of a phrase for the fact, a plain and simple one, that interest paid is a cost of doing business. We even have laws about people taking the piss which HMRC obviously don’t think they are.
On the first, the opening comment on the piece is fun:
Bad journalism again from the Times. I just had a look at the accounts at Companies House. This company doesn’t trade. It just holds shares in Cadbury group companies, along with some inter-company balances. During the year it moved some of them around and booked profit on some of the intra-group transactions. Quite normally, transactions like that aren’t taxable, because nothing really happened – they’re just rearranging the shareholding furniture within their own group.
It had no sales and no trading in the year. Nothing to see here.