BAE Predator Made [Pounds Sterling]3bn in UK ... and Paid Just [Pounds Sterling]10m Tax

Daily Mail (London), October 2, 2012 | Go to article overview

BAE Predator Made [Pounds Sterling]3bn in UK ... and Paid Just [Pounds Sterling]10m Tax


Byline: Ruth Sunderland and Peter Campbell

THE Franco-German aerospace giant which plans to take over BAE Systems benefited from some [pounds sterling]56million of tax credits from the UK government - while paying just [pounds sterling]10.5million in tax.

This is despite EADS raking in more than [pounds sterling]3billion in revenues from its British operations during 2010, according to corporate documents seen by the Daily Mail.

They also reveal a complex global maze of 276 EADS offshoots, including a string of ventures based in tax havens, such as the Cayman Islands and Jersey.

EADS, whose headquarters are in the Netherlands, also runs subsidiaries in the low-tax Republic of Ireland.

The firm, which employs 17,000 staff in Britain, is currently in talks over a [pounds sterling]31billion deal to merge with the former British Aerospace.

The revelations have sparked fears that BAE's contributions to Government coffers could dry up after it is folded into EADS, which owns Airbus.

Tax accountant Richard Murphy said: 'Here's another example of a UK company fleeing our shores for foreign ownership with the inevitable consequence that less tax will be paid in the UK.

'We'll be paying for the fighter jets and they'll be making no contribution. It's time to change our tax system to make sure every company pays fair tax where it really earns its profits.' According to its own accounts, EADS carves up its operations into subsidiaries, with each one a separately registered company. It boasts 31 such operations in the UK - each one paying a different amount of tax.

Some have not updated their records since 2010.

Some divisions paid no tax at all, while many of the others paid less than full corporation tax, which in 2010 was charged at 28 per cent. According to the latest figures available, EADS firms based in the UK paid a total of just under [pounds sterling]10.5million in corporation tax in 2010.

But the largest British business, lossmaking Airbus Operations Limited, received a tax credit of [pounds sterling]56million.

Two military satellite subsidiaries received tax credits of just over [pounds sterling]304,000. These credits far outweighed the payments made to the Exchequer, meaning that overall EADS's UK operations were nearly [pounds sterling]46million to the good in their dealings with HMRC.

Documents filed at Companies House show that Airbus Operations Limited, its main UK division employing 10,000 workers, made a [pounds sterling]206million loss in 2010 despite making sales of [pounds sterling]2.4billion.

The firm received a generous [pounds sterling]56million in tax credits from the Chancellor, relating to a 'deferred tax credit'.

Other divisions paid just a tiny amount of tax.

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BAE Predator Made [Pounds Sterling]3bn in UK ... and Paid Just [Pounds Sterling]10m Tax
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