Dame Vivienne Westwood has been accused of tax avoidance after paying £2 million a year to an offshore company set up in Luxembourg.
The fashion designer became the Green party’s biggest and best known supporter after pledging a £300,000 donation this year.
However, the most recent company accounts show her main business is paying £2 million a year to the overseas company for the right to use her name on her own fashion label.
Tax experts described the practice as tax avoidance because it deprives the Treasury of approximately £500,000 a year. Starbucks was previously criticised for adopting the same tactics.
The Green party is calling for a tax dodgers bill that would outlaw such payments to offshore companies in jurisdictions including Luxembourg. Its manifesto said: “Green party policy is to crack down heavily on tax havens and other methods of tax evasion and avoidance, and press for a transparent country-by-country reporting so that company profits can be located and taxed.”
Advertisement
Jolyon Maugham, QC, a tax barrister, told The Sunday Telegraph: “What’s odd about Ms Westwood’s arrangements is that the rights were held in the UK, but were then transferred out of the UK. The transfer means that the fee is no longer subject to UK tax. And that’s tax avoidance by any sensible definition.”
Dame Vivienne has long been known for her left-wing views and support for charities including Greenpeace, Oxfam and Aids organisations.
In 2011 she joined the Occupy London protesters outside St Paul’s. In the same year she pledged £1 million to Cool Earth, a charity that works to stop rainforest deforestation. Last year she appeared in a charity campaign video urging people to use less water in the shower.
In 2002, Dame Vivienne’s UK business sold the rights to her trademarks to Luxembourg-based Latimo SA, which she also controls, for £840,000.
A year later Latimo SA became “the ultimate parent company” of the UK business by “virtue of its acquisition of the entire share capital”.
Advertisement
Accounts for the year ending December 31, 2013 show that the company paid just over £2 million to Latimo SA for “licence fees” and a further £2 million in 2012.
By paying the money to Latimo, the profits of Dame Vivienne’s UK business have been reduced by £2 million a year.
The company stated: “Vivienne Westwood Limited is part of an independent international group of companies. Latimo SA is the holding company of this group which owns and protects the Vivienne Westwood trademarks worldwide. Vivienne Westwood Ltd pays regular royalties to Latimo SA pursuant to a licence agreement.
“Vivienne Westwood Ltd and all the companies belonging to the group pay all the required taxes in all the countries in which they trade or operate, in accordance to audited financial statements.
“All British entities based in the UK paid the required taxes. Within the UK, Vivienne Westwood Limited paid £780,228 of taxes in 2013 and £1,250,858 of taxes in 2012.”
Advertisement