Asda’s new billionaire owners paid £55m in tax in the last 5 years

Asda's new billionaire owners paid only £55m in tax in the last 5 years

The new billionaire owners of Asda have reportedly managed to pay minimal tax in recent years as a rapid expansion scheme led to billions of pounds of debt and reduced taxable income.

According to This Is Money,  the Issa brothers paid only £55 million in tax over the past five years on the back of revenues of £37.5 billion after a debt-fuelled expansion of their petrol forecourt business EG Group.

For two of those five years EG Group’s debt pile meant it reportedly paid no tax at all, as the cost of borrowings meant its profits were wiped out – therefore significantly reducing its taxable income.

According to This Is Money, EG Group’s £7.7 billion debt last year alone meant that interest payments and finance costs wiped out its £373 million operating profit.

The news comes after Lancashire-based brothers Mohsin and Zuber Issa – along with their private equity partner TDR Capital – struck a £6.8 billion deal with Walmart to purchase a majority stake in Asda, effectively bringing the Big 4 giant back under British ownership for the first time since 1999.

For almost 20 years, the Issa brothers’ EG Group has grown from one freehold site in Bury to a business employing 44,000 across more than 6000 petrol forecourts in 10 countries.

TDR Capital owns a 50 per cent stake in EG Group, sharing ownership with the Issa brothers.

Since the two firms partnered up in 2016, it reportedly quadrupled its borrowings to €8.4 billion.

This Is Money also reported that the EG Group had a paper trail that led to tax havens such as Luxembourg, the Cayman Islands and Jersey.

However, source close to the Issa brothers told the newspaper said that EG Group had “paid all the tax that was due”.

EG Group has not issued a comment.

Read the full article here – retailgazette.co.uk