Judge rules on Tesco’s tax avoidance

In a preliminary high court hearing of the libel case brought by Tesco against the Guardian, Justice Eady ruled yesterday the newspaper could file evidence of Tesco's tax schemes using specially created partnerships and holding companies in Switzerland and Luxembourg.

One of Tesco’s schemes was banned by the government in this year's budget legislation. The two schemes allegedly helped Tesco avoid up to £30m a year in UK tax, the Guardian reports.

Tesco has refused to accept an apology from the Guardian for errors in an earlier article alleging Tesco was avoiding up to £1bn in a corporation tax involving windfall profits on sale and leaseback of its UK stores and has accused the paper and its editor of telling deliberate lies.

Eady also ruled Tesco must decide by September 15 whether to accept the Guardian's offer of an apology and damages. He ordered a stay on a parallel claim by Tesco against the Guardian and its editor claiming ‘ malicious falsehood’. The judge refused Tesco permission to appeal and awarded costs against the company.

Further reading:

Tesco faces new tax questions

Read the Guardian story