Vivienne Westwood has found herself in the midst of a tax-avoidance
storm, after the publication of company accounts revealed that her
main UK business is paying £2 million a year to an off-shore
account in Luxembourg, for the right to use her name on her fashion
label.
It means that the company allegedly "cheats the UK treasury out
of about £500,000 a year," reports The Sunday Telegraph (as it reduced
the company's UK profits by £2 million for the year ending December
31, 2013) - a process that American coffee chain Starbucks was
criticized for engaging in last year.
"What's odd about Ms Westwood's arrangements is that the rights
were held in the UK, but were then transferred out of the UK. The
transfer means that the deed is no longer subject to UK tax,"
Jolyon Maugham QC, a leading tax barrister, told The Sunday
Telegraph. "And that's tax avoidance by any sensible
definition."
The revelation has also raised questions about the relationship
between Westwood and the Green Party, with the party being accused
of hypocrisy for accepting a donation of £300,000 from Westwood,
given its calls for a staunch Tax Dodgers Bill that would "outlaw
such payments to offshore companies in jurisdictions including
Luxembourg", and Westwood being criticized for apparently
supporting a political party whose agendas she allegedly doesn't
adhere to.
"Vivienne Westwood Ltd and all the companies belonging to the
group pay all the required taxes in all the countries in which they
trade or operate, in accordance to audited financial statements,"
read a statement from Vivienne Westwood Ltd. "All British entities
based in the UK paid the required taxes. Within the UK, Vivienne
Westwood Limited paid £780,228 of taxes in 2013 and £1,250,858 of
taxes in 2012. Profits, as per the decision of the board of
directors, were invested in the structure and in the international
development of the company. The donation of £300,000 to the Green
Party was made by Dame Vivienne Westwood personally and not by the
Vivienne Westwood Group."
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