Apple 'made £6bn' in UK... but paid only £10m in tax



Runs a significant operation from Republic of Ireland where tax rates are almost half



Latest technology firm to be accused of avoiding UK tax following Amazon and Google

Apple paid a paltry £10million in UK corporation tax in the last financial year, despite earning an estimated £6billion in the country over the period.



It is the latest technology firm to be accused of avoiding UK tax, following Amazon and Google.



Apple runs a significant operation from an industrial estate in Cork, in the Republic of Ireland, taking advantage of its ultra-low rate of corporation tax.



Booming trade: A shopper leaves a London Apple store clutching bags of new iPads. However despite UK profits of £6bn the firm has paid just £10m in tax

At just 12.5 per cent, the Irish charge is just over half the 24 per cent rate in the UK.



The company also has an offshoot in the Caribbean tax haven of the British Virgin Islands.



Documents from one of its two main UK divisions, Apple Retail UK Ltd, show it paid tax of just £3.79million on sales of more than £500million in the year to September 2010, the latest accounts available.

Another subsidiary, Apple (UK) Ltd, paid £6.1million in tax on sales of just under £69million.



Experts say Apple’s total sales in the UK are far higher, as many are logged elsewhere.



They estimate revenues from Britain accounted for around 10 per cent of its £63billion worldwide figure for the year.



The success of the iPhone and iPad has led analysts to predict that Apple will become the first trillion-dollar company. Its market value currently stands at $590billion (£370billion).

However, the future could also bring legal troubles. Apple is under scrutiny in the U.S., too, where its financial operations are run from Nevada – a state known for its low taxes and business-friendly approach.



In documents filed with American regulators, Apple said it paid U.S. corporation tax at a rate of 25.3 per cent – well below the statutory level of 35 per cent – due to ‘undistributed foreign earnings’ that it plans to hold ‘indefinitely’.



The success of the iPhone, left, and the iPad, has led analysts to predict that Apple will become the first trillion-dollar company



Apple has accumulated cash reserves of more than £60billion, around £40billion of which is held in foreign subsidiaries that are beyond the U.S. taxman’s reach.



The company’s accounts for 2007 to 2009 are being examined by the Internal Revenue Service – the U.S. equivalent of HM Revenue & Customs.



An audit of its federal income tax returns resulted in ‘certain adjustments’ being proposed, some of which it is appealing against.



Apple did not respond to requests for comment on its tax arrangements in Britain.



The controversy follows the news that Amazon is under investigation by HMRC.



Amazon.co.uk’s latest accounts reveal that it did not pay any British corporation tax in either 2010 or 2011 after switching its European headquarters to Luxembourg, famous for its relaxed tax regime.



The taxman is investigating Amazon’s affairs in the UK between 2004 and 2010. The website is facing similar probes in several other countries, including France, Germany, Japan and Luxembourg.



Google, like Apple, has chosen Ireland as its home, and channels money through there and the Netherlands to the tax haven of Bermuda.



A spokesman for the company said: ‘We have an obligation to our shareholders to set up a tax-efficient structure, and our present structure is compliant with the tax rules in all the countries where we operate.’





