Viagra maker Pfizer pays virtually no corporation tax in UK despite £1.8bn turnover

| November 10, 2012 | 0 Comments

  • Global pharmaceutical giant Pfizer, one of the largest suppliers of drugs to the NHS, did not pay any corporation tax in the UK last year
  • The company joins a growing list of giants that have used legal techniques to pay little or no tax in the UK
  • MPs will grill senior executives from companies including Google and Starbucks on Monday

By
Daily Mail Reporter

07:21 EST, 10 November 2012


|

12:17 EST, 10 November 2012

Pfizer, one of the largest suppliers of drugs to the NHS, avoided paying any corporation tax in the UK last year.

The company behind drugs Viagra and Lipitor produced a whopping £1.8bn turnover on its sales in the UK last year.

However, it posted an operating loss of £46m in 2010 and £59m in 2011 in the UK.

Pfizer, the company behind the drugs Lipitor and Viagra, pictured, escaped paying any tax in the UK last year

Pfizer, the company behind the drugs Lipitor and Viagra, pictured, escaped paying any tax in the UK last year

Pfizer, which has its UK headquarters in Surrey and Berkshire, is a major drugs supplier to the NHS

 Pfizer, which has its UK headquarters in Surrey and Berkshire, is a major drugs supplier to the NHS

Pfizer, renowned for developing sex drug viagra (pictured right), is a major drugs supplier to the NHS

If Pfizer’s profit margins in the UK had been similar to average, it would have made a £347m pre-tax profit on its earnings in the country. The firm might have been expected to pay 25% tax to the UK government.

Critics argue that Pfizer, which has its UK headquarters in Tadworth, Surrey, and Maidenhead, Berkshire, is typical of the way large global firms legally avoid paying tax by reporting profits in low tax havens.

It comes just days after Britain’s most senior tax official, Her Majesty’s Revenue and Customs’s chief executive Lin Homer, was slammed for ‘failing to get to grips with tax avoidance’ by an influential group of MPs.

The government has launched a crackdown on major global firms that take advantage of the tax regime to reduce their tax bills legally to funnel profits overseas.

Public outrage over the issue has mounted after it emerged that giants including Starbucks, Google, Facebook, Amazon and eBay all pay relatively little tax in the UK.

Public outrage was triggered after it emerged that global firms including Starbucks, pictured, pay relatively little tax in the UK

Public outrage was triggered after it emerged that global firms including Starbucks, pictured, pay relatively little tax in the UK

Giants including Google, pictured, will face a grilling from MPs over their tax affairs on Monday the new Google Nexus 7 tablet at the Google I/O conference in San Francisco, Wednesday, June 27, 2012.

Giants including Google, pictured, will face a grilling from MPs over their tax affairs on Monday

Global giants tax

Google:

Estimated UK earnings: £2,572m

Estimated pre-tax profit £836.7m

Tax paid in the UK: £3.4m

Starbucks:

Estimated UK earnings: £397.7m

Estimated pre-tax profit: £59.6m

Tax paid in the UK: None

Amazon:

Estimated UK earnings: £3,963m

Estimated pre-tax profit: £76.9m

Tax paid in the UK: £1.9m

Facebook:

Estimated UK earnings: £180m

Estimated pre-tax profit: £21m

Tax paid in the UK: £280,000

Ebay:

Estimated UK earnings: £802m

Estimated pre-tax profit: £184m

Tax paid in the UK: £999,000

[Source: The Independent]

Her Majesty’s Revenue and Customs has a
list of the 770 largest companies operating in the country, so that it
can keep tabs on their tax contributions.

MPs will grill senior executives from Google, Starbucks and Amazon on Monday over their corporate tax affairs.

Pfizer has already faced scrutiny over its tax affairs in the U.S. and Germany.

Charlie Elphicke, a Conservative MP who was once a tax lawyer, warned in The Independent: ‘What concerns me is that you have a company like Pfizer which has such a large presence in the UK not paying any tax at all. That raises serious questions.

‘We need to have an aggressive approach to tax like they have in America where those that evade taxes are prosecuted and those that avoid it face heavy scrutiny.’

Public Accounts Committee chairwoman Margaret Hodge, who is investigating how major global firms have been able to manipulate tax regimes to reduce their tax bills in the UK, has also called for greater transparency.

In a statement Pfizer said: ‘Due to a number of factors including the level of investment Pfizer makes into the UK and restructuring costs, Pfizer actually generated losses in the UK in 2011.

‘Under UK tax law, corporation tax is calculated on profits not turnover. Pfizer conducts business in more than 150 countries around the world.

‘At all times and wherever we operate, Pfizer complies with the appropriate rules and regulations.’

The comments below have not been moderated.

95% of Pfizer sales in the UK go to the NHS. Stop that and see how quickly they start to pay tax

David
,

Wycombe,
10/11/2012 18:06

OH COME ON NOW, WHY WOULD THIS SURPRISE ANYONE? they get their tax from US not them!!

Second class local
,

aylesbury, United Kingdom,
10/11/2012 18:06

The Tories and Labour have created this environment yet they could easily stop it, but they choose not to. Give UKIP a chance.

John
,

Portsmouth,
10/11/2012 18:02

They don’t pay tax becasue George Osborne does not want them to pay tax. Easier to hit everyone else.
Get the dosh form the “plebs” when the deficit would not exist with a clear tax concept for corporations

Nighthawkx15
,

Munich, Germany,
10/11/2012 18:01

If we pull out of the EU, would this not close most of the tax loopholes ?
A high percentage of companies taxes are paid at a lower rate in Luxembourg because they register their company there. Pull out of the EU and the companies would have to reregister for tax etc here.

john
,

glasgow, United Kingdom,
10/11/2012 17:52

This is all cobblers. Simply introduce a transactiom tax as per Income tax. Voila. Solved. If they make a loss, go bust and let efficient companies take over.

Bosk
,

Port Kar, United Kingdom,
10/11/2012 17:50

- Nick, London, United Kingdom, 10/11/2012 15:24 ~~ Yes and no. It was the great lady herself following her favourite ideology pushed for lower taxation. At the time business pips were squealing very loudly. Mine were and so were my workers. We had the ridiculous situation where it didn’t make much sense for worker to earn more. Margaret started the change to more indirect taxation with lower personal and business taxes. This article does not cover massive of indirect taxes. Pfizer and every other business create and are required to collect and pay. Final balance sheet tax is only a part of the picture.

Peter
,

Grimsby,
10/11/2012 17:49

if this Gov dose not make companys like this pay tax, then change the Gov, you have a vote in all elections, ues them. dont let is get you down.. its should be getting you up.

Peter
,

Harrow,
10/11/2012 17:48

Do you think that if you tell a lie with enough conviction it becomes the truth? The recession was caused by American banks which sold on worthless bank loans to other bankers all over the world. Bankers like Osborne and Clegg’s family. Even at the height of recession Haigh was going on banking freebie jollies to the Italian lakes, courtesy of his wife’s banking connections. Countries such as Germany, France and Canada suffered far less from the results of sub-Prime and NINJA loans because they have tighter regulations. The Tories de-regulated UK banks. – Al , Portsmouth, United Kingdom, 10/11/2012 17:05 Chancellor Brown de-regulated the banks even more during Babour’s 13yrs in Government, they also sucked up to the banks as well as big businesses that’s why the higher tax rate was just 40% for years.. You say the Tories de-regulated the UK Banks, well everything was fine until Labour came to power and showed their complete incompetence, the BUCK stops with them!

Yvonne
,

West Midlands, United Kingdom,
10/11/2012 17:38

flavour of the week , all this outing of corporates that take our money, but dont give any back, looks like a big witch hunt !

mountaindweller
,

cleveland,
10/11/2012 17:36

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