Anorak | Apple pays no UK tax yet again – this is why

Apple pays no UK tax yet again – this is why

by | 1st, July 2013

apple tax

SO,  someone’s gone and had a look at the Apple UK tax filings and once again we find that the company has paid no UK corporation tax whatever. Which really shouldn’t some as all that much of a surprise :

The US technology giant used tax deductions from share awards to employees to help wipe out the corporation tax liabilities of its UK businesses.

Accounts filed by one of Apple’s two main UK divisions, Apple Retail UK Ltd, showed the company made a pre-tax profit of £16m on sales of almost £1bn in the year to September 29.

Another subsidiary, Apple (UK) Ltd, made a pre-tax profit of £43.8m on sales of £93m, according to accounts filed at Companies House, while a third, Apple Europe, made a pre-tax profit of £8m.

However, the company offset tax deductions relating to share schemes of £27.7m against its corporation tax liabilities in the UK. The move also enabled it to claim a tax credit of £3.8m to carry forward to future years. Experts have also suggested Apple’s total sales in the UK are far higher, as many are logged elsewhere.

There’s three different things going on here.

The first is that all of their electronic stuff, iTunes and the like, gets sold from Luxembourg. The VAT rate there is lower so all the buyers of the stuff get it cheaper: this might be called tax dodging but it’s us consumers that get the benefit.

Then there’s all their hardware sales. What they actually do is buy it in from China or wherever and sell it to an Irish company. That’s where the massive profit margins are whacked onto it. The Irish company then sells it to the UK (or German, French etc) company at a price that is just about equal to the sales price minus the costs of actually selling it (ie, running Apple Stores). So all the profit

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Posted: 1st, July 2013 | In: Money Comment | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink

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