The Isle of Wight Conservative MP, Robert Seely has written to the head of Wightlink, questioning why they haven’t paid UK corporation tax on profits in the last two years. See Wightlink’s response.
A report in the County Press reveals the letter was also copied to treasury and transport ministers.
It reads,
“Wightlink appears to pay no tax on its earnings. Equally, the holding companies do not seem to pay any tax either.
“Wightlink appears to be making a good profit paying shareholders — a dividend of £14 million. When would Wightlink or its shareholders expect to start paying UK tax on its earnings?
“Wightlink’s immediate holding company, Arca Top Co, while registered in the UK, is controlled from Luxembourg and its parent company is registered in Guernsey.
“If this is correct, why is Wightlink’s corporate structure offshore? Has this structure been put in place to minimise tax liabilities?
“What benefit is there for the Island in this arrangement? What benefit is there for the UK taxpayer?
“If Wightlink was sold and took on more debt, would it have to make even more profit to pay its shareholders?”
Seely: Oppose asset-sweating of vital public service
The MP went on to say,
“I understand a buyout firm is amongst the frontrunners to purchase the company. If this organisation takes the same attitude as previous owners and seeks to asset-sweat Wightlink rather than develop a long-term plan, I will be opposing the sale and highlighting my reasons for doing with the new owners and with government.
“What assurances will you give that any new owners will act in a responsible way and see Wightlink as a vital public service?
“Prices for the business seem remarkably inflated. I assume this is due to profit forecasts which make Wightlink highly attractive, that it is in effect a duopoly and, if you live in some parts of the Island, an effective monopoly.
“Wightlink’s possible sale seems a good opportunity to highlight a number of issues that concern me about Wightlink’s social responsibility in relation to your profits and corporate structure.
“I appreciate what you and your management team have been trying to do in forming a better relationship with the Island. My issue is not with you, or your team, but with the owners and the ownership structures.”
Wightlink: No tax due to high levels of investment
A spokesperson for Wightlink told OnTheWight,
“No corporation tax has fallen due for Wightlink as a result of the high levels of investment it makes in building new ferries and improving facilities for customers. This applies to any company which reinvests its profits to renew its assets.
“Wightlink has recently invested £45million in its new flagship ‘Victoria of Wight’ and improving port infrastructure on the Portsmouth to Fishbourne route.
“Wightlink makes and declares all its profits within the UK.”
Possible sale
Three years ago Basalt Infrastructure Partners were rumoured in the industry to have paid Australian bank Macquarie £300 million for the company.
The sale of that investment is now the subject of news again, after it was revealed that buyout firm, Mayfair Equity Partners, were closing in on a deal.
Article edit
11.45am – Comment from Wightlink added
Source: IWCP
Image: © With kind permission of Allan Marsh
