Alliance Boots has hit back at accusations that it has avoided paying £1.1 billion in UK taxes since it was privatised in 2007, arguing that it "fully complied" with tax laws in every country in which it operated.
Alliance Boots said it observed the "highest standard of good ethics" and paid over 50 per cent more in taxes in 2012-13 than it had in 2006-7 - the last year it was a publically listed company - in response to a report released today (October 15) by a coalition of trade unions and charities.
Trade union Unite, anti-poverty charity War on Want and US trade union federation Change to Win accused the healthcare giant of avoiding UK taxes through the tax havens of Luxembourg, the Cayman Islands and Zug, Switzerland.
However, Alliance Boots said the report contained "significant inaccuracies". Although it was registered in Switzerland, Alliance Boots paid the same amount of tax in the UK as if it was based here, it said.
The report claimed Alliance Boots made an estimated £4bn (40 per cent) of its revenue from prescriptions and related services, but the company argued the figure was closer to £2.2bn (25 per cent).
Alliance Boots had published "comprehensive information" on its taxes in its annual report in May, the company said, and it had not paid its shareholders since the company was privatised. It had invested £2.1bn to grow its business "in recent years", it added, including £1bn capital expenditure in the UK.
"Alliance Boots conducts its business and organises its tax affairs strictly in compliance with all applicable law (including legislation in the UK) and observes the highest standard of good ethics," it said.
War on Want executive John Hilary said it was "utter hypocrisy" that Alliance Boots relied mainly on the NHS for 40 per cent of its UK revenues, while "avoiding its own tax responsibilities".
"Boots has abused the trust of the British public and must immediately come clean on its tax affairs and act more responsibly towards this country," said Unite general secretary Len McCluskey.
The report also called for the government to modernise private equity-backed businesses, reform taxation in British overseas territories and increase transparency for public contracts undertaken by private companies.
Last year, Alliance Boots executive chairman Stefano Pessina warned that the British public's "anti-business" attitude and failure to support the government's corporation tax cuts could encourage the company to invest in other countries.