Here from Wikipedia:
See also
Criticism of Tesco
Also the
story in Inverness referred to as Tesco Town where it is claimed 51p in £1 spent on food
is in a Tesco and an application for a fourth store has been defeated by local councillors 8 to 4
who are concerned about the effect on local shops.
How I ask are Morecambe/Heysham getting on with three stores ?
Article in the Guardian - May 2008
"In May 2007 it was revealed that Tesco had moved the head office of its online operations to the tax haven of Switzerland. This allows it to sell CDs, DVDs and electronic games through its web site without charging VAT.
[32] The operation had previously been run out of the tax haven of Jersey, but had been closed by authorities who feared damage to the islands' reputation.
[32]
In February 2008 a six month investigation by
The Guardian revealed that Tesco had developed a complex taxation structure involving offshore bank accounts in the tax haven of the Cayman Islands.
[33] Tesco is in the process of selling its UK stores, worth an estimated £6 billion, to Cayman Island based companies set up by Tesco. These companies then lease the stores back to Tesco. At the time
The Guardian claimed that this arrangement would enable Tesco to avoid an estimated £1 billion tax on profits from the property sales, and also to avoid paying any tax on continuing operation of the stores, as the rate of corporation tax in the Cayman Islands is zero. Tesco defended this arrangement, saying it has a duty to organise its affairs in a tax-efficient manner, and pointing out that the corporation already pays a lot of tax, including
VAT on behalf of its customers, and PAYE and
national insurance contributions on behalf of its employees.
Following these revelations, several MPs called for an inquiry into Tesco's tax avoidance schemes.
[34]
Tesco issued a libel writ against the
Guardian five weeks later. Tesco denied that it had avoided paying £1 billion corporation tax, but refused to answer further questions, or to clarify the purpose of the complex artificial tax structure they had created. Further investigations by the
Guardian discovered that the tax structures were aimed at avoiding
Stamp Duty Land Tax, and not
corporation tax as originally thought. SDLT is leveled at 4%, and corporate tax at around 30%, so the figure of £1 billion tax avoided by Tesco has been revised to an estimated £90-£100 million.
[35] According to the
Guardian "Tesco has been involved in a game of cat and mouse with HM Revenue & Customs since 2003. On three occasions when the government has closed a loophole to prevent avoidance, Tesco has taken advantage of ingenious schemes to get around it. Tesco still has 36 stores wrapped up in UK limited partnerships - with Cayman Islands registered partners - which were established in 2006 before the latest loophole was closed."
[35]
In June 2008 the government announced that it was closing another tax loophole being used by Tesco.
[36] The scheme, identified by British magazine
Private Eye, utilises offshore
holding companies in Luxembourg and partnership agreements to avoid a corporation tax liability of up to £50 million a year.
[36] Another scheme previously identified by Private Eye involved depositing £1 billion in a Swiss partnership, and then loaning out that money to overseas Tesco stores, so that profit can be transferred indirectly through interest payments. This scheme is still in operation and is estimated to be costing the UK exchequer up to £20 million a year in corporation tax.
[36] Tax expert Richard Murphy has provided an analysis of this avoidance structure.
[37] "
