German discount supermarket Lidl has published the amount of Corporation Tax that it paid in Britain for the first time. The chain has around 600 stores in the UK, with plans for a further 900 and it paid more than £25 million in tax on the profits which were earned over here in 2013.
Based on analysis, that is an effective corporation tax rate of around 20%. It is slightly lower than the average rate paid by UK based rivals Sainsburys and Morrisons. Lidl said that the rate of tax they pay is ‘in line with UK law’.
According to current law, Lidl is not legally obligated to publish details of how much money it collects in Britain as it is a Germany based company. However, the retailer has been criticised by UK supermarkets for the lack of transparency and secrecy. The other supermarkets also believed that Lidl avoided paying similar levels of tax, something that has been disproved by Lidl.
A spokesperson for Morrisons said it was ‘a pity Lidl had taken such a long time’ to publish its tax bill. He said that Morrisons was happy to pay their large corporation tax bill and disclose it.
Lidl, alongside fellow German supermarket Aldi has seen sales increase heavily in recent years, up by 24% and 35% over the last year. In comparison, Tesco and Morrisons have seen their sales fall by 3% and 4% per cent respectively. Also, this week Tesco announced its chief executive was to step down after failing to turn the company’s profits around.