Global Radio’s tax arrangements have made the headlines as it was highlighted the company hasn’t paid any corporation tax for five years.
The Sunday Times reported on an assessment from the campaigning group Corporate Watch, which said Global has not paid any UK corporation tax in the last five years, pointing out that interest payments on loans it has taken from its owners through the Channel Islands Stock Exchange have wiped out its taxable profits in the UK.
But it has been common knowledge for the last couple of years that whilst the company has reported operating profits, it has made a pre-tax loss meaning it doesn’t need to pay corporation tax.
The report points out that LBC, owned by Global, is currently home to deputy prime minister Nick Clegg’s weekly phone-in show Call Clegg and suggests the news will be embarrassing for Labour leader, Ed Miliband, who in 2011 appointed Sir Charles Allen, Global’s chairman, to lead a review of the party’s structure and finances.
A spokesman for Global Radio said: “Global has invested over £500m in commercial radio in the UK over the past 6 years and played a major part in promoting and rejuvenating the sector. Global is a fully tax-compliant company, as agreed with HMRC.”
Corporate Watch continues: “Global’s UK companies are ultimately owned and controlled by the Jersey-based company Global Radio Group Limited. The UK companies’ accounts show they have borrowed £233 million from their owners at a massive 15% interest rate, with another £252 million at 10.5% from another company only described as a ‘connected party’.”
Global Radio will find out in one month (May 22nd) if their takeover of GMG’s radio division gets Competition Commission approval after almost a year since the deal was done.