Cadbury's pays no tax on UK profits (2024)

It angered chocolate lovers by changing its recipes, shutting a factory after promising not to, and shrinking its products without cutting the price.

But last night the American firm behind Cadbury’s was accused of treating the British with contempt for slashing its tax bill as well.

Mondelez International, previously Kraft Foods, did not pay a penny of UK corporation tax last year despite generating sales of more than £2billion and profits of almost £150million.

The company has used an elaborate ploy to avoid paying corporation tax in Britain since its controversial £11.5billion take over of Cadbury’s five years ago.

This involves using the interest payments on £8.2billion of debts which are listed as a bond on the stock exchange in the Channel Islands – a well-known tax haven.

These payments are logged as losses and written off against the combined £145million profit generated by three UK subsidiaries – Cadbury UK, Cadbury plc and Mondelez UK – last year.

Although this is entirely legal, it marks another low in the company’s increasingly strained relationship with the public.

Labour’s Margaret Hodge, chairman of the Commons all-party group on responsible tax, said the Quakers who founded Cadbury’s in Birmingham in 1824 would be ‘turning in their grave’.

She said: ‘Cadbury has a proud history of investing in its communities. Yet this American company is avoiding taxes while using our workforce and infrastructure. It is selfish in the extreme and shows contempt for the people who buy their goods.’

Mondelez boss Irene Rosenfeld, who spearheaded the swoop for Cadbury’s in 2010, is already a controversial figure. She sparked outrage after breaking a promise not to shut Cadbury’s Somerdale factory near Bristol, then refused to account for her actions in front of MPs.

More recently the 62-year-old, who earned a £14million pay package last year, oversaw around 200 job cuts at Cadbury’s Bournville site in Birmingham.

The American firm also infuriated British chocolate lovers by shrinking some of their favourite Cadbury products including Dairy Milk bars and multi-packs of Curly Wurlys and Creme Eggs – but not cutting prices.

It also changed the Fruit & Nut and Creme Egg recipes.

Shortly after taking over Cadbury’s, Kraft switched control of the company from Bournville to Switzerland to slash tens of millions of pounds a year off its tax bill.

The lengths taken by its American owners to avoid paying UK corporation tax contrasts with Cadbury’s approach before the takeover.

The confectionery business paid more than £45million in corporation tax in just one year.

A Mondelez spokesman said the firm had invested more than £200million in UK jobs, science and manufacturing, including a £75million investment in its Bournville site.

He added: ‘In common with all global businesses we pay corporation tax based on the laws of the countries in which we operate.

‘We comply with all applicable tax legislation in the UK, working closely with the relevant authorities, and on a global basis we pay hundreds of millions of dollars in corporate tax annually.’

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