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UK squeezes extra £136m tax payment from Apple

UK squeezes extra £136m tax payment from Apple

LONDON: Apple has been forced to pay an extra £136m tax bill in the UK after “an extensive audit” by HM Revenue & Customs in the latest crackdown affecting the US tech giant. The payment was revealed in the accounts of Apple Europe, one of the group’s UK subsidiaries, which reported that “this payment of additional tax and interest reflects the company’s increased activity”.

HMRC is thought to have argued that the subsidiary, which performs marketing services for an Irish sister company, had not received a large enough commission on the sales it helped secure. The payment, which covered several years leading up to 2015, is the latest state claim against Apple. Ireland was ordered by the EU to claw back a tax penalty of €13bn from Apple considered as illegal state aid, and the company agreed to pay €318m to Italy in 2015 to settle a long-running tax investigation. There has been a widespread effort by countries to extract more revenue from Apple, which has concentrated profits in its ultra-low tax Irish subsidiaries. Apple paid just €344m of tax in its main European markets over the decade to 2015, according to Financial Times calculations. Its foreign tax rate was 6 per cent in 2015. Apple Europe provides sales support, marketing, financial and administrative services to other group companies. The company employs 791 people and made a pre-tax profit of £297m in the 18 months to April 2017. The total tax charge was £192m.