Zero tax bill
Saga and the AA, the private-equity owned businesses
that are merging, incurred no liability for
corporation tax last year, according to the BBC. And
in their two-and-a-half years of ownership by private
equity, they paid almost zero corporation tax.
In the same period, the private equity owners of
these businesses — Permira, CVC and Charterhouse generated gains for themselves of £2.5bn.
This is about three-and-a-half times the value of
their initial investment.
The AA’s accounts show that it ended both 2005
and 2006 with the taxman actually owing it money £67.9 million and £11.9 million. However in 2006,the AA made an operating profit of £252 million,which was 29% higher than in the previous year.
But almost all this profit was wiped out by £222.3million “finance costs” on its £1.7 billion of debts.
