It has been reported that Apple has allegedly avoided payments of corporation tax on sales in the UK.
In 2010 Apple are said to have sold £6bn worth of products in the UK, on which they allegedly only paid £10m in corporation tax.
It has been alleged that Apple avoids paying large amounts of corporation tax through the use of foreign subsidiaries in the British Virgin Islands and Ireland; although tax avoidance is the legal structuring of one’s tax affairs.
Some of Apple’s UK business operations are run in Cork, Ireland, where a very low rate of corporation tax is paid at 12.5 per cent. That is nearly half of the UK corporation tax rate which amounts to 24 per cent.
Latest documents available on 2010 accounts from Apple subsidiaries – Apple Retail UK Ltd and Apple (UK) Ltd – show that corporation taxes of £9.89m were paid on sales totalling £569m in the UK.
It has been estimated that Apple’s British revenues accounted for nearly 10 per cent of their worldwide figure of £63bn.
Another company that is reported to be under HMRC investigation for tax avoidance is online retailer Amazon.co.uk, who is alleged to have avoided paying corporation tax over the past three years on sales though to total £8bn.
Like Apple, Amazon runs operations in Ireland; HMRC are said to be investigating the online retailer’s UK tax affairs from 2004 through to 2010.
However, HMRC have refused to, and are unable to, give out information on individual tax investigations.
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