Not content tricking migrant workers, Byron burgers now found hiding taxable profits abroad

First they rounded up their staff and let immigration authorities seize those with out-of-date papers. Now British gourmet burger chain Byron has been exposed as hiding its profits overseas to avoid UK tax.

On Monday hundreds of people assembled outside Byron’s Holborn branch in London to protest the restaurant’s recent ambush on ‘illegal workers’. Wider boycotts may follow, however, after the chain was found filtering its cash into offshore subsidiaries.

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The company is thought to have paid zero corporation tax despite making £3 million (US$4 million) in profits in 2015.

According to Corporate Watch, Byron’s parent company, the investment fund Hutton Collins, has taken a loan of £83.7 million on behalf of the burger restaurants, with a 10 percent interest rate to boot. The loans come directly from Luxembourg-registered companies.

But why would Hutton Collins burden Byron with so much debt? Corporate Watch believes as normal dividends on the company’s profits would be taxed by HM Revenue & Customs (HMRC), Hutton decided to receive their investment in the form of loan repayments, which are virtually tax free.

The growing web of shell companies fully- or partly-owned by Byron’s own shareholders involved in the scheme is endless. So much so, that Byron now owes banks £30.7 million but has a staggering £96.9 million debt to subsidiaries once the interest rate is factored in.

“Profits generated in Byron Hamburger Limited [are] offset by interest costs on shareholder loan notes and external debt,” the restaurant’s own accounts state.

The tactic is well-known among other British businesses, with telecommunications giant Vodafone infamously avoiding an estimated £8 million UK tax bill in part through loans on its 3G investments from 2000.

It is unknown how much Byron would owe HMRC if it paid its share of taxes.

A spokesman for the company said Byron is “subject to standard UK taxes” and that Hutton Collins is based in Luxembourg due to its international clientele rather than that country’s minimal fiscal policies.

He said “companies of similar size to Byron” contracted similar loans on similar interest rates.

Via RT. This piece was reprinted by RINF Alternative News with permission or license.