The boss of Thomson and First Choice parent company Tui Travel has admitted it paid “little or no” corporation tax in the UK during the past year, after posting an 8% jump in annual pre-tax profits to £390 million today.
Chief executive Peter Long said the company had offset its previous losses against profits. “Within the UK, because we have accumulated tax losses as a result of restructuring the business, there’s little or no tax being paid in the UK,” he said on Sky News.
“But that’s as a consequence of these carried forward losses that we have. Once those losses have been utilised, then we will pay tax in the normal way as we comply with all the laws of the lands that we operate in.”
Tui described its UK performance as “outstanding” with an underlying profit up to £197 million from £149 million in 2011, while operating margins grew to 5.4% from 4.2%.
A Tui spokesman confirmed: “We have no profits chargeable to UK corporation tax because they are all eliminated due to capital allowances, losses brought forward from prior years as a result of restructuring and cost incurred as a result of the ash cloud in 2010.
“This offsets our UK taxable profits in full and is fully compliant with UK tax law, perfectly legitimate and normal practice. We expect to pay small amounts of UK corporation tax in 2013/14 with significantly larger amounts in later years as our brought forward losses are eliminated.”