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Mondelez, which owns Cadbury, is facing controversy over its tax arrangements after it was reported that it had not paid UK corporation tax last year.
An investigation by the Sunday Times found the company was wiping out Cadbury’s bills using interest payments on an unsecured debt, which is listed as a bond on the Channel Islands’ stock exchange. The interest paid on the loan can be offset as a loss against gains made elsewhere in the company.
The arrangement, which is legal, meant Mondelez was able to pay no UK corporation tax despite accounts showing that Cadbury UK, its subsidiary, made profits of £96.5m in 2014 and £83.6m in 2013.
Margaret Hodge, chairwoman of the Commons all-party group on responsible tax, told the Sunday Times: “Multinationals like this are deliberately exporting their profits with artificial company structures to avoid tax. The founders of Cadbury who set it up as an ethical company will be turning in their graves.” » | Hilary Osborne | Sunday, December 6, 2015
