Ritchie writes

Alliance Boots... made a pre-tax profit of £944 million.

But the government gave them a £75 million tax credit by cutting their tax rate. No strings attached.

Ritchie wants to give you the impression that the government has piles of money lying around. So much so that, instead of spending it on the NHS or welfare benefits, they decided to cut a cheque to some wealthy Swiss investors.

This is, as you might expect, pretty far from the truth. Alliance Boots, like any other publicly accountable entity, discloses the impact of the future impact of tax on its accounts. And, like most companies, it has made accounting profits on which tax isn't yet due. Previously, it had provided a deferred tax liability at the known statutory corporation tax rate. But when that changed, it had to release some of the provision.

There's no tax "credit" involved. The tax isn't due on those profits yet. When it is, it'll be taxed at a lower rate than had previously been foreseen. Of course, if the rate goes up in the future, there will be an exceptional charge.

Ritchie's misrepresentation of facts really knows no bounds.

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Filed under: Other blogs, Taxation with tags alliance boots, corporation tax, deferred tax, idiots, lies, richard murphy