Exclusive: Firm challenged as part of drive to ensure companies receiving public investment pay ‘fair share’ of UK tax
Laing O’Rourke has been challenged over its tax affairs amid a drive to ensure firms receiving the billions of pounds of public money going into construction and infrastructure pay their “fair share” of UK taxes.
This week Conservative MP Stephen McPartland, who last year launched a campaign for greater tax transparency among FTSE100 companies, wrote to Laing O’Rourke chief executive Anna Stewart (pictured) raising concerns over the firm’s tax arrangements.
According to its latest annual review, Laing O’Rourke, the UK’s largest privately-owned contractor, is a “wholly owned subsidiary of Suffolk Partners Corporation, a company incorporated in the British Virgin Islands”, a British Overseas Territory regarded by many as a tax haven.
The review also says Laing O’Rourke, which posted group turnover of £3.5bn last year, itself is registered in Cyprus, a country with one of the lowest rates of corporation tax in Europe at 12.5%.
However, the firm says the overall group pays tax at a rate “broadly in line” with the UK corporate tax rate of 24%.
McPartland’s intervention came a week after Stewart’s appointment to the government’s Construction Leadership Council, which is made up of top business and government figures and will oversee the implementation of the industrial strategy for the sector.
McPartland’s letter notes Stewart’s role on the council and asks for her view on corporate tax transparency among firms benefiting from public spending.
Taxpayers expect contracts to go to companies who are paying their fair share of taxes
Stephen McPartland, MP
He wrote: “British taxpayers expect government contracts to be awarded to companies who are paying their fair share of taxes here in this country and I wonder if you agree with us?”
According to construction information provider Barbour ABI, Laing O’Rourke has won roles on more than £1bn worth of public projects since January last year, including Crossrail projects at Liverpool Street station (pictured) and Tottenham Court Road worth £300m and £200m respectively.
McPartland told Building: “It’s important that we now start looking at those companies who will make huge profits from the billions of pounds of infrastructure [investment] the chancellor recently announced.
“We need to ensure companies who play by the rules and pay their fair share of tax do not lose out to companies who are benefiting from lower costs because they pay lower taxes than here in the UK.
“This massive investment in infrastructure is designed to help the economy grow by investing here in the UK. The plan cannot work if that investment is transferred outside of the UK.”
Major global corporations such as Google, Amazon and Starbucks have come under fire in recent months over the size of their tax payments in the UK, amid growing efforts by the government to tackle international tax avoidance.
On its website, Laing O’Rourke says: “We believe in doing business in a way that is fair, transparent and, above all, safe and sustainable.”
A Laing O’Rourke spokesperson said Stewart would review McPartland’s letter and respond to him on all points.
He said Laing O’Rourke Group’s tax rate for 2012/13 was 23.2%, and that in 2013/14 the group expected to be a net payer of tax at a rate similar to the UK corporation tax rate.
He said: “Laing O’Rourke is committed to global compliance in its financial and tax affairs as well as to health, safety and environmental considerations and its extensive social obligations in the communities where it works.”