Heathrow Airport is facing heat for its tax bill after the Sunday Times pointed out that the airport has paid just £24 million ($34.9 million) in corporation tax since 2006, despite paying out over £2 billion ($2.9) to its owners.
Heathrow used perfectly legal measures to circumvent the tax, offsetting tax against interest payments on big debts it incurred after its 2006 takeover, led by Spanish infrastructure giant Ferrovial.
But the fact that it began paying dividends to its owners in 2012, with payments totalling £2.1 billion ($3 billion), has raised eyebrows.
Labour MP Margaret Hodge, who chairs the all-party group on tax, told the Sunday Times:
Heathrow makes money out of British people travelling and it’s about time they accept the responsibility that they should also contribute to the pot. If people are paying massive dividends and not paying tax, this smells wrong.
Heathrow told the Sunday Times:
Government set up this tax policy so investors would be happy to put their money into upgrading British infrastructure. Heathrow complies with all tax rules, does not operate tax avoidance measures, does not route funds through tax havens and does not accept shareholder loans to fund the business. It is also one of the largest business-rate payers in the UK.
The airport, which is currently lobbying hard for government support for a third runway, put out a business update on Monday, saying: “Heathrow continued to play a leading role in helping Britain’s exports reach global markets” in 2015.
Here are the other highlights from the full-year update:
- 75 million passengers flew through Heathrow in 2015, up 2.2% on 2014;
- Passenger volumes up 14% to China, 8% to Latin America and 6% to the Middle East.
Heathrow CEO John Holland-Kaye says: “2015 has been a banner year for Heathrow, serving more passengers than ever and being recognised in a number of awards as the best major airport in Europe for both passenger service and eco-innovation. The record levels of passenger satisfaction are due to a significant increase in training, apprenticeships and the number of frontline colleagues moving into management roles.
“Our new expansion plan will make Heathrow the most sustainable hub airport, and Britain the best connected country in the world. We are ready to serve.”