Business department supports calls for contractor to explain tax arrangements
Pressure on contracting giant Laing O鈥橰ourke over its tax affairs has intensified after the business department backed calls for the firm to explain its tax arrangements.
Last week, 好色先生TV revealed that Conservative MP Stephen McPartland had written to Laing O鈥橰ourke chief executive Anna Stewart raising concerns over the tax affairs of the contractor, which is registered in Cyprus and is a 鈥渨holly owned subsidiary鈥 of a company incorporated in the British Virgin Islands, Suffolk Partners Corporation. Laing O鈥橰ourke said Stewart would review the letter and respond.
According to Barbour ABI, Laing O鈥橰ourke has won roles on more than 拢1bn of public sector work since January 2012. Stewart also has a seat on the government鈥檚 Construction Leadership Council, chaired by business secretary Vince Cable.
This week a Department for Business, Innovation and Skills spokesperson said: 鈥淟aing O鈥橰ourke have said they plan to respond to Stephen McPartland regarding his concerns.
鈥淢embers of the Construction Leadership Council are expected to demonstrate principles of best practice.
鈥淲hile the council has not discussed tax issues, the business secretary has been clear on his view that companies from all sectors, including construction, should pay their fair share of tax in accordance with UK law. This view is shared across government.鈥
Labour MP Margaret Hodge, who chairs the influential Public Accounts Committee, which is investigating the tax affairs of large companies, said: 鈥淭his appears to be another example of how widespread aggressive tax avoidance is in the corporate sector.
鈥淎 culture has grown up in which companies feel under no obligation to pay their fair share of tax and in my view that has to change.
鈥淚f any company is benefitting from the taxpayer pound, they have an obligation not to aggressively avoid tax.鈥
Hodge added that the committee - which has previously grilled bosses of multinationals such as Starbucks, Amazon and Google on their alleged tax avoidance in the UK - will continue with its investigations this autumn.
A Laing O鈥橰ourke spokesperson said the group鈥檚 鈥渆ffective tax rate鈥 for 2012/13 was 23.2%, 鈥渂roadly in line with the UK corporate tax rate of 24%鈥, and that in 2013/14 the group expected to be a 鈥渘et payer of tax at a rate similar to the UK corporation tax rate鈥.
He said: 鈥淟aing O鈥橰ourke is committed to global compliance in its financial and tax affairs as well as to health, safety and environmental considerations and its extensive social obligations in the communities where it works.鈥
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