12 July 2014 - 11:32am | posted by | 2 comments

Net-A-Porter accused of paying less tax than it should by turning its profits into loss

Net-A-Porter has been accused of paying less tax than it should Net-A-Porter has been accused of paying less tax than it should

Internet shopping giant Net-A-Porter is the latest firm to be embroiled in a tax scandal with Channel 4 reporting that the chain raked in sales of £435m in the year to March 2013, but posted a loss of £24.7m. 

Channel 4 claimed that Net-A-Porter used clever planning and "perfectly legal mechanisms" to transform profits into a loss. 

According to the report the loss was created, in part, by the way "it chooses to pay its senior executives" - through shares - with the losses then used to reduce the future tax bill. 

Tax Research UK's Richard Murphy said: "In this particular company's case, we don't know where it's making its profits, we don't know where it's paying its tax. 

"We don't actually even know it's paying its tax because there is no cash flow statement in these accounts because there is a Swiss parent company." 

Murphy explained that this means Net-A-Porter doesn't have to include information "to tell us if this tax, which it says it owes, is even being passed over to the revenue…frankly I can raise very many more questions on these accounts than I can provide you with answers." 

Former member of the Treasury select committee, Labour MP John Cryer, said that Net-A-Porter's alleged tax dodging "stinks" and that "HMRC should pull the finger out and have a look at exactly how this system works". 

"HMRC, in my experience, are a little bit too easy on big companies with lots of money," he said. 

In response to the allegations Net-A-Porter told Channel 4 that the account "fully reflect the company's business in the UK". 

UPDATE: Net-A-Porter has contacted The Drum with a statement on the allegations raised by Channel 4. 

The statement reads: "The Net-A-Porter Group Limited accounts fully reflect the company’s business within the UK. The Net-A-Porter Group is fully liable for UK Corporation Tax on the results of these UK operations. The NET-A-Porter Group Limited is not a publicly listed company and its parent, Richemont, does not comment on the financial performance of individual businesses within the Group‎."

 
“The Net-A-Porter Group Limited is a business with a global reach and operations in the UK, the USA and Hong Kong. The Net-A-Porter Group Limited employs over 1,500 people in the UK, its largest geographical concentration of personnel.”
 

Comments

12 Jul 2014 - 20:09
Fastamir31600

ANOTHER CONGLOM WORKING UNDER THE 'ITS OKAY TO SCREW BRITAIN AND THE BRITISH TAXMAN'....WAKE UP BRITAIN...

0
0
25 Jul 2014 - 12:18
thatblokedon's picture

This article from Forbes debunks all of Channel 4's claims including those made by their so-called 'expert' Richard Murphy - http://www.forbes.com/sites/timworstall/2014/07/13/channel-4-news-is-bei...

1
0

Please sign in or register to comment on this article.

Latest Projects from the Profile Hub

University of Aberdeen - Graduate Business School brochure

25/11/2014
Background:  999 Design has enjoyed a long working...

We delivered a 265% increase in ROI year-on-year for Pandora UK.

25/11/2014
Pandora designs, manufactures and markets, hand-finished,...

Maximising an Industry Changing Story

24/11/2014
In November 2014, WOW air announced £99 fares (yes, that’s...

In The Snow Magazine Front Cover

20/11/2014
Front cover from a fashion shoot in Zermatt earlier this...