Firm’s tax arrangements leave a bitter taste

The American confectionary giant which owns Cadbury is facing fierce criticism after it emerged that it paid no corporation tax in the UK last year.

Following an investigation by a broadsheet newspaper, it became apparent that Mondelez had organised its affairs so that interest paid on a loan offsets gains made elsewhere in the company.

The arrangement is perfectly legal, but means that the firm has not had to pay corporation tax – despite the fact that its subsidiary, Cadbury UK, made profits of almost £100million last year.

Margaret Hodge, chairwoman of Parliament’s all-party group on responsible tax, was highly critical of the situation.

“Multinationals like this are deliberately exporting their profits with artificial company structures to avoid tax,” she told the Sunday Times, who published the revelations over the weekend.

“The founders of Cadbury, who set it up as an ethical company, will be turning in their graves.”

Mondelez was born out of Kraft Foods, the US firm which bought up Cadbury in 2010, in a deal which was worth £11billion.

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

“We comply with all applicable tax legislation in the UK, and on a global basis we pay hundreds of millions of dollars in corporate income tax annually. Since 2010 we are proud to have invested over £200m into both UK-based manufacturing and R&D supporting our 4,500 employees in the UK.”