An investigation by the BBC television programme Panorama has revealed that a number of high-profile UK businesses engaged in secret deals with Luxembourgian authorities in order to avoid paying corporation tax.
The companies, the most well-known of which is pharmaceutical giant GlaxoSmithKline (GSK), decided within the last few years to effectively transfer their profits overseas so that they were not liable for the tax, which was then set at a rate of 28 per cent.
The corporate media group Northern & Shell, which owns Channel 5, OK! Magazine and the Express, is also believed to have been involved.
Both companies have defended their tax arrangements, with a spokesman from GSK stating that protecting the investments of their shareholders is of vital importance.
Although, strictly following the letter of business law, the firms are not suspected of acting illegally, there has been condemnation of the practice from tax experts. Meanwhile, Margaret Hodge MP, Chair of the Public Accounts Committee, bemoaned the lack of power Parliament has to effectively scrutinise such contentious incidents.
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