The global giants that supply some of the UK’s most popular meat brands, including KFC, Nando’s chicken and Sainsbury’s organic products, rely on offshore companies that can avoid paying millions in UK tax it seems.
Research by the Guardian and Lighthouse Reports shows that two companies, Anglo Beef Processors UK and Pilgrim’s Pride Corporation (owned by Brazilian beef giant JBS), have reduced their tax burden by building businesses and financing them in ways that enable it offshore. It has become clear that it seems to reduce tax and one expert calls this “active tax avoidance.”
These practices are not illegal, but have become widespread in recent decades as multinational corporations and their accountants seek ways to reduce their tax burden. Many argue that complex financial structures may allow some companies to avoid paying their fair share of taxes. And that, they say, will lead to lower revenues for governments as taxpayers are forced to bear the bills.
In this case, the meat company involved has branches not only in the UK, but also in the Netherlands and Luxembourg, with different tax regimes. By lending money from a company in one country to its affiliates in another country and lending it at different interest rates, companies can significantly and legally reduce their tax burden.
A tax expert said the strategy employed by Anglo Beef Processors UK and Pilgrim’s Pride Corporation amounted to ‘active tax avoidance’ and, while not illegal, was ‘inconsistent with good corporate citizenship’. The public and the customers of all these meat companies, don’t like it.”
The Guardian and Lighthouse reports estimate that two meat companies have avoided paying him more than £160m in taxes.
Both companies say they comply with tax laws in all jurisdictions in which they operate. UK’s largest beef producer Anglo Beef Processors UK (ABP UK) operates the UK beef business of ABP Food Group and is the UK’s largest beef producer. A leading supplier of meat to UK supermarkets through its own brands and branded products.
According to Trojaan’s public annual report published by the Dutch Business Register, ABP UK appears to have remitted interest to Trojaan Investing BV, another Dutch-based ABP Food Group company.
In its annual report, Trojaan Investing BV describes itself as a financial company and says it is part of ABP Food Group. The report also states that the company has no employees.
The 2017 annual report details his £63m loan granted to ABP UK at his 5% interest rate due in December 2022. This amounts to his £3.15 million interest paid by ABP UK to his Trojaan each year, from which his UK tax is deducted. The report reveals that Trojaan has received interest-free loans from other group companies based in Ireland and Jersey.
According to its annual report, between 2013 and 2017, Trojaan earned his €118m (£103m), most of which came from his other ABP Food Group companies. was due to interest on a loan to According to his report, between 2013 and 2017, Trojaan said he paid €1.1m (£960,000) in taxes, with an average effective tax rate of 0.9%.
As an unrestricted company, ABP UK is not required to file public accounts.
An ABP spokesperson said, “No further comments.”
According to their websites, Pilgrim’s UK and Moy Park – both part of the US-based Pilgrim’s Pride Corporation – now control 25% of the largest meat producer, Brazilian beef giant JBS.
Pilgrim’s UK and Moy Park’s UK holding company – dubbed Onix Investments UK Ltd – will invest a total of $172.8 million (£147 million) in interest over four years from 2017 on behalf of Sandstone, based in Luxembourg.
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Source: The Guardian