Anorak | War On Want Goes Doolally Over Alliance Boots

War On Want Goes Doolally Over Alliance Boots

by | 18th, December 2013

WAR on Want has decided to show its gross ignorance by complaining about the tax affairs of Alliance Boots. It’s their new big campaign, they’ve even gone off and complained to the OECD about it all. But the problem is that they’ve not actually shown that any tax has been avoided: not even shown that less tax has been paid overall.

As they complain :

New research shows that Alliance Boots, the high street chemist and pharmaceutical giant, has avoided more than £1 billion in tax since it went private six years ago through taking on excessive debts, profit shifting and corporate restructuring. This report, Alliance Boots & The Tax Gap, published by War on Want, Unite the Union and Change to Win, exposes the full scale of Boots’ tax avoidance for the first time.

There’s a problem with this though.

OK, their complaint is that Boots used to be funded largely through equity. That means that profits were made, corporation tax charged to those profits and that’s just lovely. Along came the corporate raiders who borrowed $9 billion and bought the company. The company now has to pay the interest on that $9 billion. That interest is tax deductible to the company because it is an expense of the business. Thus corporation tax revenues fall and that is not lovely.

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Posted: 18th, December 2013 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink