Britain will miss out on tax income
THE British Government will be one of the big losers from Kraft’s £11.5billion takeover of Cadbury.
City experts said the Treasury will miss out on hundreds of millions of pounds of tax in coming years just when it is most needed to tackle the country’s spiralling public debt.
This is because British companies taken over by foreigners rapidly start paying less tax as the new parent organises matters to minimise the bill. If Kraft takes the axe to UK jobs – and experts believe cuts will almost certainly be made in Cadbury’s head office – the Exchequer will miss out on the tax generated by those jobs.
The Government will also have to pay benefits to those made unemployed and it will miss out on tax paid by executives who decide to move abroad after a deal. The tax take will fall further should Kraft decide at some point in the future to move UK operations abroad.
Cadbury paid £33million in corporation tax in the first half of 2009. As it is a large multinational, it is difficult to quantify how much is paid in the UK.
