BOOTS’ PARENT COMPANY has avoided more than £1.1bn of UK tax since 2008, according to trade union Unite and anti-poverty group War on Want.
According to the two groups, Alliance Boots was loaded up with loans from affiliates in low-tax jurisdictions during its 2007 buyout by private equity group Kohlberg Kravis Roberts & Co and the drug distributor’s billionaire executive chairman Stefano Pessina. Last year US drugstore chain Walgreen Co bought 45% of the company.
In the year before the buyout, Boots posted healthy operating profits and had a tax expense of £181m. In the six subsequent years, the company had reported losses because of rising interest payments, causing a net tax credit of more than £130m, while intra-company loans have helped drive down liabilities.
There was no suggestion in the report that Alliance Boots had engaged in any unlawful activity.
Unite general secretary Len McCluskey said: “The revelation that yet another high street name is fleecing Britain, taking work from our NHS while avoiding their tax responsibilities, will leave taxpayers furious. Boots has deliberately woven a web to support its tax avoidance habit, the scale of which is so big it could have paid for two years’ worth of prescription charges for everyone in England.
“Boots has abused the trust of the British public and must immediately come clean on its tax affairs, and act more responsibly towards this country.”
For its part, Alliance Boots issued a lengthy dismissal, noting that neither Unite nor its partner charities contacted it during the compilation of the report.
There are, “significant inaccuracies”, within the report, too, it added.
“Alliance Boots conducts its business and organises its tax affairs strictly in compliance with all applicable law (including legislation in the UK) and observes the highest standard of good ethics,” it said. “We, together with our associates and joint ventures, currently have a presence in more than 25 countries and fully comply with local tax legislation in each country where we operate, including the UK.”
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,
While some resistance to change is to be expected, the degree of controversy surrounding HMRC's Making Tax Digital proposals has surprised the government