Birds Eye salmon fish fingers, one of the brands belonging to Iglo Foods. (Photo Credit: Birds Eye)
Iglo Foods resorts allegedly used legal loophole to avoid taxes
(UNITED KINGDOM, 10/25/2013)
Frozen foods firm Iglo Foods, together with two other business groups, has been accused of resorting to a legal loophole to avoid paying taxes.
A joint investigation performed by the newspaper The Independent and Corporate Watch reveals that Igloo Foods (owner of Bird’s Eye) has been using this resource to send interests tax-free abroad thanks to a foreign investment incentive, known as the Eurobond exemption.
According to this investigation, Iglo and two other firms related to food and drink sector were trying to cut down their tax bill in the United Kingdom (UK) by taking high-interest loans from their owners through the Channel Islands Stock Exchange.
A percentage of the interest payments would usually go straight to HR Revenue & Customs (HMRC), significantly reducing the overall tax saving from the scheme. But because the loans were made through the Channel Islands Stock Exchange they qualify for the quoted Eurobond exemption and can leave the UK tax free.
“The British public will be justifiably outraged when they hear about this further evidence of tax avoidance by high street stores and manufacturers. They want to know that the places they shop and the products they buy aren’t run and made by greedy tax dodgers,” expressed a spokeswoman for the campaign group UK Uncut, Sarah Kwei, to The Independent.
Britain’s PM, David Cameron has played down the reasons why his government still has not dealt with the problem and closed the legal loophole which is costing tax payers as much as GBP 500 million (USD 809.4 million) every year.
The Channel Islands, a tax haven, is often used by big conglomerate firms to avoid tax. Finance dominates life there, particularly in the islands of Jersey and Guernsey, where finance represents almost 50 per cent of economic activity. The other islands have several institutions and banks which have survived thanks to bailouts from taxpayers all over the world.
The Eurobond exemption was introduced back in 1984 with the aim of boosting third-party investment in the UK but is being used more and more as a means of lending between related parties.
Last year HMRC had plans for scraping it off but due to external pressure from the financial sector it was forced to leave the issue as it was.
By Gabriela Raffaele
[email protected]
www.seafood.media
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