Oh, no, please not Apple as well, groaned the hipsters. The magical company that sells super-expensive products and yet somehow nailed it during the recession did not pay a single penny of corporation tax in the UK in 2012. No wonder the recession didn’t hurt, eh?
Apple has been a little cleverer about it than firms such as Google and Starbucks, which use the old ‘royalty paying subsidiary’ trick to funnel liability into a tax haven. Apple has done a bit of this, but it has also used tax deductions stemming from share awards to its employees.
This is part of what is now becoming a saga for Apple, since the US Senate Committee decided to take a very specific interest in the reasons why it managed to avoid $10bn of US tax in a single year.
But it’s not just the US and UK where it’s avoiding tax: it reportedly puts 84% of its overseas sales through an Irish subsidiary that is not tax resident anywhere in the world. Using this wheeze, it pays a 0.05% tax rate.
Apple doesn’t make public the proportion of profits that comes from its UK operation, but suffice it to say that the firm’s US accounts filings show that it made $15bn profit on $36.3bn sales to European customers last year.
As usual, there is no suggestion that Apple has done anything illegal. But we find it difficult to believe that the UK somehow generated no profit for them. Unless the rent on that Regent Street flagship store is $2bn a year.