The Guardian\’s analysis of Tesco\’s accounts over the past five years also shows that the company has paid an effective tax rate of just over 20% on the rest of its profits, at a time when the UK corporation tax rate is 30%.
It might be because I\’m dim, might be because I\’m missing something.
But I\’m reasonably certain that there are various allowances, credits and so on, that you can use in corporate accounting. The tax treatment of depreciation is rather different from the profit calculations. I\’m sure you out there more knowledgable on the subject can provid more examples.
But their argument seems to be that if the tax rate is 30% then 30% of profits should be paid: which would only be true if there were no such allowances or credits. And given that the tax code is stuffed full of such things, that the rate paid is not the same as the headline rate really shouldn\’t come as any surprise.
So what is it that Murphy is really saying?