Small companies can save tax too

SIZE DOES NOT MATTER: Small business can enjoy the same tax planning as big business
UK individuals who do not declare income that is held in foreign bank accounts are breaking the law. Her Majesty’s Government recently paid £100,000 for information about Liechtenstein bank accounts held by UK individuals.
However, the same does not necessarily apply to UK companies: Some of the UK’s biggest companies use complex and secretive but perfectly legal tax plans to limit the tax they pay.
Some companies will simply shift the management and control of the business to a low-tax country, however others adopt a different approach:
Diageo plc (UK drinks giant) transferred ownership of brands including Johnnie Walker and J&B to an off shore subsidiary virtually tax-free. It pays UK corporation tax equal to about 2% of gross profits.
Two major drug firms have shifted ownership of their brands to tax havens. Their UK operations can then be made to pay royalties for the use of the trademarks, reducing the “UK profit” and thus the amount of UK tax.
A household name has been deliberately loaded with debt so that it no longer has any profits to pay tax on.
According to the National Audit Office, 30% of the UK’s biggest companies pay no corporation tax – NOTHING!