BBC's James Alexander Gordon Dies Tom Fox Set To Become New Villa CEO F1 Driver To Make History F1 Team Lotus To Further Trim Expenses Bankia Grants Valencia Grace Period Barcelona Says It Paid $108M For Suarez Swiss To Hand Over Desailly's Tax Info Women's Rugby Winners Want Pro Contracts Former FIA Boss Calls For Budget Cap City Cuts Cost Of Arsenal Tickets By 50%
Enter amount in full numerical value, without currency symbol or commas (ex: 3000000).
Upcoming Conferences and Events
SBD Global/July 25, 2013/Finance
F1 Uses British Tax Loophole To Pay Only $1.5M In Corporate Tax On Revenue Of $1.5B
Published July 25, 2013
U.K. RELIEF: In London, Simon Cass reported the standard rate of cooperation tax in the U.K. is 24% of a company’s profit. But F1 "has slashed its tax bill" by taking out £2.5B ($3.8B) worth of loans from offshore companies within the group. The interest on the loans, which amounted to £387.7M in '11, "is tax deductible and thus F1 has managed to engineer a mammoth saving in the U.K." The flotation prospectus states that F1 has "an efficient tax position," adding, "The group’s tax charge is materially dependent on the amount of U.K. tax relief available to it for interest expense on certain intra-group loans. We expect our aggregate cash tax payments to remain broadly consistent with prior years" (DAILY MAIL, 7/24).
POLITICAL WAR: Also in London, Kevin Eason reported F1 "could now join a roll of shame that includes Starbucks and Google, who have been targets for the anger of politicians." British PM David Cameron "is waging a campaign against corporate tax avoiders while the Organisation for Economic Co-operation and Development is also pushing countries to update their tax laws to pull companies into line." Although these fresh revelations "will damage F1’s standing at a time when anger is growing at multinationals that deliberately avoid paying tax, it could perversely attract investors looking for smart ways to spend their money on highly profitable businesses with very low tax liabilities." It remains to be seen whether British motorsport "will also suffer embarrassment from the revelations." The government "has latched onto F1 and motor sport as a world leader in technology with a raft of proposals to develop the industry and push export growth." It is estimated that 3,500 businesses employing about 40,000 people generate motorsport sales worth £7B ($10.8B) (LONDON TIMES, 7/24).