SCOTTISH travel search business Skyscanner received a tax credit of nearly £18 million in the last financial year thanks largely to its takeover by Chinese company Ctrip in December.

As part of the deal, which saw Ctrip pay £1.4 billion for the Edinburgh-based technology business, millions of pounds’ worth of share options that had been granted to Skyscanner staff in preceding years vested, knocking £19.5m off its tax bill for the year.

According to accounts filed at Companies House, Skyscanner, which earns a commission every time a flight, hotel or car is booked on its site as well as when visitors click through to partner sites, saw its turnover increase by 44 per cent to £158.3m in the year to December while pre-tax profits rose by 54 per cent to £17m.

As some of the share options granted to staff vested early due to the takeover the company incurred an exceptional charge of nearly £10m, which reduced the pre-tax profit figure to just over £7m.

However, due to the tax advantages associated with company share incentive plans, a tax credit of nearly £18m brought the final profit figure for the year to £25m.

Gareth Williams, who co-founded Skyscanner in 2002, said the tax credit was “primarily driven by share-based payment deductions that are one off in nature”, adding that he would not expect “such a magnitude of credit to occur again”.

“We hold ourselves to a high standard in relation to paying a fair rate of tax in all of the jurisdictions in which we operate,” he added. “We believe the company and its employees should be contributors to the funding of public services and infrastructure in the country in which they are located and that this is integral to us operating sustainably and building a core value of trust with users.”

In total, the firm paid out £16.2m in respect of its employees’ share options during the year. However, as the sum is based on the value of the options at the time they were granted as opposed to the value of the shares when the business was sold, the cash pot that was shared by the firm’s 511 UK staff members would have been considerably higher.

Mr Williams noted that the Ctrip deal “represents a significant milestone in our growth as a company”, although he said that Skyscanner would continue to operate as an independent business.

“Whilst we will seek to leverage Ctrip’s extensive experience in travel and booking technology, our strategy remains unchanged,” he added.

“We will continue to operate the company independently with the core mission of becoming the most trusted and most used online travel brand in the world.”

Mr Williams added that one of the main obstacles to the company achieving this goal was competition in the global travel and tourism industry, which he said represents around 10 per cent of the global economy.

“Inevitably the market is extremely competitive,” he said. “”If new entrants continue to enter the market with services which directly compete with those provided by Skyscanner this may have an adverse effect on our financial results.

“However, one of Skyscanner’s differentiators is that it has over 1,200 connections with online travel partners. This has taken over ten years to establish and means Skyscanner is not as reliant on global distribution system data in the same way as most of our competitors are and represents a significant barrier to new entrants.”

He added that the company is also facing difficulties from partner companies’ websites having lower mobile functionality than its own, meaning Skyscanner could end up receiving lower referral fees from them.

Finance director Barry McGonagle said Skyscanner has introduced a direct booking function that will allow customers to book with different providers without having to visit their sites.