Thursday 9 July 2020 11:44 am

Apple's retail network pays just £6.2m tax on £1.4bn UK sales

Apple’s UK retail arm paid just £6.2m in tax last year, despite raking in sales of almost £1.4bn as demand for its products boomed.

Accounts filed today for Apple Retail, which manages its UK store network, showed revenue jumped 15 per cent in the 12 months to September 2019, despite not opening any new stores. Profit before tax rose 11 per cent to £37.2m.

Meanwhile earnings at Apple’s corporate UK arm fell more than 70 per cent last year, as it expanded its presence in the country with a rapid increase in hiring for technical staff.

Filings for Apple UK, which manages research and development efforts in the country, reported a profit before tax of £35.8m in 2019, down from £105.6m a year earlier.

Its costs spiked dramatically, rising 94 per cent to £173.7m from £94.8m a year earlier. Employee numbers rose similarly, reaching 926 staff, up from 473.

Its resulting tax bill fell from £15.2m in 2018 to £9.1m — a tax rate of 25 per cent. This was despite turnover for the 12 months to September 2019 reaching £296.6m, up from £241.2m in 2018.

The accounts come as Apple is set to hear the result of its appeal against the European Commission next week over €13bn in back taxes it was ordered to pay the Irish government in 2016.

The tech firm is fighting alongside Ireland to challenge the EU’s ruling, which said the pair violated state aid rules in a tax deal that permitted Apple to record its sales through two Irish units.

It is also facing another two cases from the Commission regarding anti-competitive behaviour in its App Store and Apple Pay practices.

A third set of accounts published today showed Apple’s European sales and marketing arm, Apple Europe, paid £74.3m in tax on a profit of £444m, up from £285.6m.

Apple is currently building a new headquarters at Battersea Power Station. The firm will move its approximately 1,400 existing UK staff to the new site in 2021, though construction was temporarily paused earlier this year due to the pandemic.

An Apple spokesperson said: “As the largest taxpayer in the world, we know the important role tax payments play in society and always pay all that we owe. We are very proud of our many contributions across the UK and last year spent over £2bn with hundreds of suppliers.

“Our investment and innovation supports more than 325,000 jobs in the UK and, in addition to our tax contributions, we also think it’s important to do more for people and society. We focused our attention on supporting the response to Covid-19, making significant financial contributions and donating face masks and shields here in the UK.”