Tax victory for Morrisons
A big tax win has seen Morrisons slash its effective tax rate to 15%, the company has said
Morrisons
declined to say what its successful tax wrangle was about, indicating only that
HM Revenue & Customs had closed some enquiries going back several years, and
that a ‘significant amount of corporation tax’ was recoverable.
Normally, the company would record a six-month finance charge of around £30m,
but this half-year claimed a credit of £2.4m as a result of the tax boost and
other changes.
The reduced corporate tax burden gifted to large UK corporates by the
government in the last budget also contributed to Morrisons good fortunes,
leading to a large release of deferred tax following the change in rate of UK
corporation tax from 30% to 28%.
Overall, the net finance credit of £2.4m reflected the impact of a reducing
pensions deficit, the one-off interest benefit on repaid corporation tax and low
levels of net debt ahead of the full roll out of the group’s investment
programme.
Morrisons added that the victory was a one-off and expected to see the net
finance cost returning to normal levels in the second half of the financial
year.
