DRUGS giant Pfizer has emerged as the latest profitable multinational company that has escaped having to pay tax in the UK.
It had a turnover of £1.8bn on its sales in the UK last year, but despite its huge business in this country, the accountants of its British subsidiary say it made an operating loss of £59m in 2011 and £46m in 2010.
In that time it has spent £7m on a new cold storage warehouse – the largest of its kind in Europe – at its manufacturing base in Havant.
That’s in addition to spending £49m on the site since Pfizer took it over from Wyeth in 2009.
But the firm’s critics say its operating loss in this country is typical how multinational companies are able to legally avoid paying tax by piling costs into high tax jurisdictions, while reporting profits in low tax havens.
Globally, Pfizer made $12.7bn (£8bn).
If its profit margin in the UK had been similar to average, it would have made a pre-tax profit of £347m on its UK earnings – on which it might have been expected to pay tax of 25 per cent.
MPs are already scrutinising global firms such as Amazon, Google, Facebook and Starbucks for not paying enough corporation tax in this country.
It looks as though Pfizer could join that group, especially after it brought in efficiency experts to save money.
Around 2.7 million people in Britain and 40 million people around the world take Pfizer medicines every day, and the site in New Lane employs 320 people.
In a statement Pfizer said: ‘Due to a number of factors including the level of investment Pfizer makes into the UK and restructuring costs, Pfizer actually generated losses in the UK in 2011.
‘Under UK tax law, corporation tax is calculated on profits not turnover. Pfizer conducts business in more than 150 countries around the world.
‘At all times and wherever we operate, Pfizer complies with the appropriate rules and regulations.’