East Lancashire employer Rolls-Royce paid no corporation tax despite £1.4bn profit (From Chorley Citizen)
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East Lancashire employer Rolls-Royce paid no corporation tax despite £1.4bn profit
12:00pm Wednesday 6th March 2013 in East Lancashire
ENGINE giant Rolls-Royce, which employs more than 1,000 people at its Barnoldswick factory, paid no UK corporation tax in 2012.
The revelation in its annual report has brought criticism from Labour.
Pendle Tory MP Andrew Stephenson defended the firm, saying it received more in tax reliefs on its multi-million pound research investments in the UK than it owed in corporation tax. Rolls-Royce reported a record year for profits but paid nothing to the Treasury and received £3million credit.
Its annual financial statement shows it made £1.4bn in pre-tax profit in 2012, an increase of 24 per cent on 2011.
For the second year in a row its tax bill in the UK remained at zero. The company declined to make an official response but senior sources said 85 per cent of its sales were overseas, so the majority of its £218m tax was paid abroad.
They added that Rolls-Royce declared its full UK tax liability to Revenue and Customs but invested hundreds of millions in UK research and development and the resultant tax reliefs covered its bill.
Hyndburn Labour MP Graham Jones said: “There is no reason for Rolls-Royce not to be paying their fair share of tax.”
Mr Stephenson said: “They invest massively in research and development and this is reflected in their tax bill.”