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Apple accused of 'tax dodging' in Britain

Apple avoids paying higher taxes by using foreign subsidiaries

In the tax year ending 25 September 2010, Apple paid just £10.3 million in corporation tax, the company's accounts for its three main British subsidiaries have revealed.

The Telegraph reports that Apple dodged paying higher tax by using foreign subsidiaries, such as Ireland and the British Virgin Islands.

According to the report, tax experts have said that they expect Her Majesty's Revenue & Customs to investigate Apple's financial situation. Apple's worldwide turnover was more than $115bn (£72bn) in the year ending 24 September 2011, and over $75bn (£47bn) in the year in question (ending 25 September 2010). British turnover is thought to account for around 10 per cent of Apple's worldwide sales.

At the Budget on 21 March, the Chancellor said that the Government would be paying much closer attention to "morally repugnant" tax dodging. Chris Sanger, tax partner at Ernst & Young said: "All multinationals will be having to justify themselves to the tax authorities to make sure they are paying the right amount of tax." However, Sanger did highlight that multinational companies such as Apple that have foreign subsidiaries make it difficult to establish the correct amount of tax that needs to be paid.

The Telegraph points out that in the US last year, Apple paid a tax rate of 24.3 per cent, over 10 per cent lower than the 35 per cent level of corporation tax set in the US.

It has been predicted that Apple will announce another record-breaking quarter when it reveals its financial results for fiscal Q2 2012 on 24 April.

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