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

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.

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.

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

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

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.

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.

 

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

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.'

 Source: Daily Mail UK  

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