Private equity backed supermarkets Asda and Morrisons did not pay a penny of corporation tax last year, as new disclosures shed a light on how buyout firms minimise tax by loading their companies up with debt.
In the decade before they were bought out by their current private equity owners, they paid an average of more than £200 million of corporation tax a year between them.
But since their buyouts, their profits have been reduced to losses, mostly due to hefty interest payments on the new debts loaded onto their balance sheets. As corporation tax is only levied on profits, they pay nothing.
Last year, Tesco and Sainsbury, who are more conventionally financed, paid corporation tax of £247 million and £120 million respectively. Britain’s headline
