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by Matthew Beard
Gatwick bosses were today accused of "hypocrisy" for avoiding corporation tax while campaigning to build a new runway for the benefit of the UK economy.
Margaret Hodge, head of the powerful Public Accounts Committee, said the airport should pay its "fair share" if it wants its campaign to be credible.
She also criticised Heathrow airport which has not paid corporation tax, levied at 21 per cent on company profits, for several years.
But it is the tax affairs of the Sussex airport that have caused the most controversy following an investigation by the Standard. Gatwick's Guernsey-based parent company Ivy Mid Co LP has invested in a £437 million 'Eurobond' which charges the airport 12 per cent interest and which critics say is designed to avoid tax.
Gatwick said tax authorities were "wholly aware" of their funding structure, and the Eurobond was commonly used by other infrastructure companies. The scheme had not helped the airport avoid tax as it was not in a profitable situation due to the cost of a £1 billion upgrade to the airport under its new owners, Gatwick said.
Accounts for the past four years for Gatwick Airport Limited (GAL) show pretax losses of £322 million and a tax credit of £192 million, but despite these losses it has paid dividends to its overseas shareholders of £436 million.
The Standard has also learnt that Heathrow has not paid corporation tax for several years, offsetting the cost of a new terminal to build a tax credit of £234 million despite pre-tax profits of £429 million.
But the airport, which says it is key to the UK's economic growth, said it "looked forward to" paying corporation tax later this year and did not "route funds through tax havens".
Ms Hodge, a potential London mayoral candidate, said that ministers should put airports under pressure to pay corporation tax as the bidding process for airport expansion reaches its conclusion next spring.
She said the companies "made a fortune" from their UK activities, which relied on public services, adding: "For them to pretend they are only in it for the benefit of the UK economy is a touch hypocritical."
A Gatwick spokesman said: "Gatwick Airport is fully compliant with UK tax law and HMRC are wholly aware of our funding structure."
A Heathrow spokesman said it complies with all tax rules, does not operate tax avoidance measures, and is "entirely UK based for tax purposes".
October 15th 2014