Cadbury owner paid no UK corporation tax last year | Cadbury

Cadbury owner Mondelez is facing controversy over its tax arrangements after learning it failed to pay UK corporation tax last year.

A Sunday Times investigation found the company was wiping out Cadbury’s bills using interest payments on unsecured debt, which is listed as a bond on the Channel Islands stock exchange. Interest paid on the loan may be offset as a loss by gains made elsewhere in the business.

The arrangement, which is legal, meant Mondelez was unable to pay any UK corporation tax despite accounts showing its subsidiary Cadbury UK made profits of £96.5m in 2014 and £83.6 million in 2013.

Margaret Hodge, chair of the Commons cross-party group on Responsible Taxation, told The Sunday Times: “Multinationals like this deliberately export their profits with artificial corporate structures to avoid tax. Cadbury’s founders who created it as an ethical company will be rolling over in their graves.

Mondelez grew out of Kraft Foods which bought Cadbury five years ago in a deal worth over £11billion. An FT report after the purchase claimed Cadbury had tax avoidance schemes in place when it was bought by the multinational, saying the chocolate maker had set up a loan scheme which allowed it to reduce its UK tax bill at just £6.4m a year. a profit of £100 million.

A Mondelez spokesperson said: “Like all global companies, we pay corporation tax based on the laws of the countries in which we operate.

“We comply with all applicable UK tax legislation and globally pay hundreds of millions of dollars in corporation tax every year. Since 2010 we are proud to have invested over £200 million in UK based manufacturing and R&D to support our 4,500 UK employees.

“Importantly, independent academic research has also shown that as a business we are worth over £1 billion to the wider UK economy, illustrating that our impact extends well across the country. beyond the factory gates.”

A spokesperson for Mondelez said it had recently invested £75million in four new lines at its Bournville site and research has shown that for every £1 spent in the UK, £1.42 additional was generated in the British economy.

“This makes Mondelez worth over £1bn to the UK economy and in the 2013-14 financial year our total contribution was £1.86bn,” the gatekeeper said. -word.

“As a contributor to the UK economy, we are committed to investing in the UK as a strategic hub for our people and our business for the future.”

Shortly after the Cadbury takeover, Kraft announced it would close a factory in Bristol with the loss of 400 jobs, although it had pledged before the deal to keep it open, and in January it announced that 250 jobs would be lost at its Bournville plant. .

Consumers have also been shocked by changes to Cadbury products since the deal was signed. Earlier this year, the company changed the chocolate in its eggs to cream, which is no longer dairy milk, and reduced the size of the packs from six to five. More recently, it announced a switch from raisins to raisins in some of its Fruit & Nut bars.