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Cadbury’s US owners paid ZERO corporation tax in UK despite profits rocketing

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Cadbury’s US owners paid ZERO corporation tax in UK despite profits rocketing by more than 700 per cent to £185million

  • Mondelez UK Ltd paid zero corporation tax in the UK last year despite huge profit
  • The company 'directed a dividend to its parent company of almost £250million'
  • Shadow Chancellor John McDonnell called it 'outrageous' and 'unacceptable'

By Isabella Fish For The Daily Mail

Published: 20:49 EDT, 10 October 2018 | Updated: 22:37 EDT, 10 October 2018

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The US owner of chocolate giant Cadbury that sells and distributes products in Britain paid no corporation tax in the UK last year, it was reported last night
The US owner of chocolate giant Cadbury that sells and distributes products in Britain paid no corporation tax in the UK last year, it was reported last night

The US owner of chocolate giant Cadbury that sells and distributes products in Britain paid no corporation tax in the UK last year, it was reported last night

The US-owned firm that sells Cadbury products in Britain paid no corporation tax here last year, it was reported last night.

Mondelez UK Ltd cut its bill to zero, despite profits rocketing by more than 700 per cent to £185million.

The company – the biggest British offshoot of the chocolate brand’s US owner – managed to offset its profits to help slash the potential £35million tax bill.

Instead, it directed a dividend of almost £250million to its immediate parent company based in Switzerland, the Daily Mirror reported.

Mondelez UK Ltd is part of a network of 48 British subsidiary companies owned by US food giant Mondelez International.

Last night it was revealed that despite the arms of the business making profits of £1.3billion, they paid £5.9million combined in corporation tax last year.

Shadow Chancellor John McDonnell said: ‘This is outrageous. Time and time again we’ve warned the Government this type of behaviour is unacceptable.

Shadow Chancellor John McDonnell told the Daily Mirror: ‘This is outrageous. Time and time again we’ve warned the Government this type of behaviour is unacceptable'
Shadow Chancellor John McDonnell told the Daily Mirror: ‘This is outrageous. Time and time again we’ve warned the Government this type of behaviour is unacceptable'

Shadow Chancellor John McDonnell told the Daily Mirror: ‘This is outrageous. Time and time again we’ve warned the Government this type of behaviour is unacceptable'

‘We have told them they urgently need to tighten the rules on tax avoidance.

‘This will do nothing but anger people who are going out to work every day, paying their taxes through PAYE.

‘The Government has to act now to crack down on tax avoidance.’

Mondelez UK accounts reveal that its turnover rose from £1.64billion to £1.66billion and its profits increased to £185million from £22million. The rise was mainly due to £146million of dividends from two subsidiaries – its Terry’s chocolate business and a coffee business in the Netherlands. This cash offset its profits and helped cut the corporation tax – which is payable on profits – to zero.

Alex Cobham, chief executive of the Tax Justice Network, called on Philip Hammond  to force multinational companies to produce accounts for each country
Alex Cobham, chief executive of the Tax Justice Network, called on Philip Hammond  to force multinational companies to produce accounts for each country

Alex Cobham, chief executive of the Tax Justice Network, called on Philip Hammond to force multinational companies to produce accounts for each country

Alex Cobham, chief executive of the Tax Justice Network, said Mondelez was doing ‘a piece of financial engineering that is very sad given Cadbury’s long history of working to generate value in the communities where they work’. He added: ‘Mondelez are stripping value out, by siphoning off taxable profits from the UK through large intra-group dividend payments. It is a problem with international tax rules.’

He called on Chancellor Philip Hammond to force multinational companies to produce accounts for each country they operate in.

It is not the first time Chicago-based Mondelez International has come under fire. The firm, when it was known as Kraft, was criticised for being allowed to purchase Cadbury for £11.5billion in 2010. It has also been condemned for reducing the size of Heroes chocolate tubs.

A Mondelez spokesman said: ‘In common with all global businesses, we pay corporation tax based on the laws of the countries in which we operate.’

The firm, which also owns Kenco, Bassett’s and Oreo, employs 4,000 staff in the UK and says it is ‘a significant contributor to the UK economy’.

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