Virgin faces £9m tax bill
Sir Richard Branson's Virgin group faces questions over the structure of a £21m sale of subsidiary
Virgin may be landed with a £16m bill as a result of a tax structure it used
to sell a Japanese subsidiary.
The Japanese tax authorities are pursuing the group for liabilities arising
from the sale of a 40% stake in Virgin Cinemas to Toho, the film production
Virgin had sold the shares to another subsidiary in Switzerland at a deflated
price before selling it on and thus paying a much lower tax rate on the
transaction, The Times reported today.
Virgin said that the company had done nothing illegal and would be
challenging the accusation. Some £9m of tax is at stake, and Virgin might also
have to pay a £7m fine if it loses.