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Tobacco firms 'not paying enough UK corporation tax'

By Caoimhe Toman

Date: Thursday 07 Feb 2019

Tobacco firms 'not paying enough UK corporation tax'

(Sharecast News) - Large tobacco companies have been accused of not paying enough UK corporation tax compared to the profits they make.
A study from the University of Bath found that the four largest tobacco firms -- Imperial Brands, British American Tobacco, Gallaher and Tobacco International -- pay hundreds of millions of pounds in tax overseas but pay less than the headline rate of UK corporation tax.

They all made UK operating profits of more than £1bn between them in 2016 but paid £83.6m combined, a rate of less than 10%.

Smoking cost the economy £11bn in England alone in 2017, according to a government estimate. Out of this figure around £9.5bn was generated in tobacco excise duty across the whole of the UK which left a £1.5bn gap not met by corporation taxes.

Lead author Dr Rob Branston from the University of Bath School of Management said: "Despite the enormous profits these companies enjoy, levels of corporation tax paid are pitiful.

"The government must better hold these companies to account, and an essential first step is the publication of accurate country by country information on sales and profits."

Coauthor Professor Anna Gilmore, director of the research group, said: "With the NHS under intense funding pressure, these findings need to be acted upon by the Treasury.

"It is unacceptable that tobacco companies, which are enormously profitable, are not paying for the harm they cause. Until they begin to do so, they remain incentivised to keep selling their uniquely deadly product."

A spokesperson for Imperial Brands said the company did not recognise some of the report's estimates, adding that Imperial paid corporation tax of £50m.

"Our total tax contribution in the UK is approximately £4.5bn annually, making us one of the highest UK tax contributors," the company said.

JTI said it also paid all its taxes, including £138m in corporation tax from 2013-17 and £3.7bn in excise duty.

BAT said it had reduced tax liabilities by putting £500m into its pension scheme between 2011 and 2016. "In 2017, once we take account of everything we do in the UK our UK corporation tax payment totalled £26m," it said.


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