Member Article

Lidl reveals £25 million tax pay-out

Budget supermarket Lidl has hit back at claims of having a secretive structure by revealing it how much tax it has paid for the first time.

The German chain, which has 600 shops in the UK and plans to build 900 more, claims to have forked out more than £25 million tax on profits here in 2013 - amounting to about 20% corporation tax.

Because Lidl is a privately-owned company based on Germany, it is not legally obliged to publish details of how much money it makes in Britain.

Instead the firm publishes an overall set of accounts without a breakdown of each country.

Lidl has been criticised privately by UK supermarkets for its lack of transparency and secrecy.

Morrisons boss Dalton Philips is one of several people who have called for foreign-owned retailers to declare their tax bills amid fears they have an unfair advantage over their UK rivals.

However, Lidl said in a statement: “At Lidl we believe that every company has a social and economic responsibility to pay tax in correspondence with its earnings.”

It added that it would “continue to pay our fair share of UK corporation tax on all our UK profits”.

The move comes after several global companies, including Starbucks and Amazon, have come under attack over their tax arrangements in the UK.

Lidl, together with its low-cost rival Aldi, has enjoyed a rapid expansion in Britain at the expense of the “Big Four” supermarkets.

Lidl added that it was “worth noting that the corporation tax rate in Britain, currently 21%, is more attractive from a business investment perspective than the German tax rate”.

“Furthermore,” the supermarket added, “we do not engage in any tax-avoidance schemes, nor do we have any subsidiaries in low-tax countries.”

The company said that it had not filed accounts with Companies House because it met UK filing obligations through its German parent group.

Lidl and Aldi, also German-owned, have both seen an increase in sales in recent years, up by 24% and 35% respectively, while Tesco and Morrisons have seen dips of 3.1% and 3.9% in the same period, according international consumer behaviour specialists Kantar Worldpanel.

Experts predict Lidl and Aldi, who between them currently control 8.3% of the UK grocery market, could increases that share to 20% within a decade.

This was posted in Bdaily's Members' News section by Martin Walker .