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Revealed: how the company regenerating the Clyde pays as little tax as possible

A multi-billion pound conglomerate heavily involved in the regeneration of Glasgow is among the UK's most aggressive tax avoiders.

The Peel Group, which owns Clydeport and hundreds of other companies in the UK and internationally, has received millions of pounds from the public purse but has paid only minimal rates of corporation tax, the Sunday Herald can report.

Tax justice campaigners have called for a procurement bill currently going through Holyrood to include a commitment to tackling such aggressive tax avoidance.

The Peel Group uses legitimate measures to drastically reduce its tax bill in the UK. In the last financial year, Peel Ports Limited paid no tax at all on profits of more than £628 million.

Another Peel Group company, Peel Ports Investment Limited, reported profits of more than £104m but paid no tax.

The Peel Group is the lead partner in the Glasgow Harbour development in the city's west end. Glasgow Harbour, which is expected to be worth around £1.2 billion by the time it is completed, received a £6m grant from Scottish Enterprise in 2006, as well as funding from Glasgow City Council and the European Union.

Glasgow Harbour Limited is a subsidiary of Peel Holdings. In the year to March 31, 2013, Peel Holdings (Ports) Limited paid no tax on profits of £34m.

Glasgow Harbour Limited is just one of hundreds of subsidiary Peel companies registered in the UK, but ultimately controlled by a private family trust, the Billown Trust, registered offshore in the Isle of Man.

The Peel Group has significant interests across the UK, and owns numerous ports, retail and media facilities including Mersey Docks, Durham and Doncaster airports and MediaCityUK in Salford.

The group's Scottish portfolio includes office space in Blythswood Square and Robertson Street in Glasgow city centre, the Meadowside complex in Renfrew and Straiton retail park in Edinburgh.

Clydeport Ltd, which Peel purchased in 2003, has been involved in numerous regeneration projects in Glasgow and owns vast swathes of land on both banks of the Clyde. In 2012, Peel Environmental was granted planning permission to build a giant energy-from-waste plant, in the Shieldhall area of Glasgow, and a recycling centre in Clydebank.

All of Peel's national and international concerns lead back, through a complex web of intermediate "parent" companies and subsidiaries, to Tokenhouse Limited, a company with total assets reportedly worth more than £18bn. Tokenhouse Limited is registered in the Isle of Man.

The Isle of Man is a renowned offshore tax haven. In a 2012 speech, Business Secretary Vince Cable described tax havens such as the Isle of Man, the Channel Islands and the Cayman Islands as "sunny places for shady people".

The Peel Group, like other large companies such as Starbucks and Google, avoid tax liabilities in the UK through "base erosion and profit shifting", a process that can take a wide variety of forms, says Richard Murphy, a chartered accountant and tax justice campaigner.

"Almost certainly the Peel group will be shifting profits, paying interest to offshore companies and charging management fees from offshore companies and selling developments which are held through offshore companies.

"It is a UK-based company that does the development but it is owned by an offshore company, and not paying tax on that capital gains as a result. Those are the ways they are likely to be taking profit out of the UK. All of them (are) legal. We have a tax system that is effectively encouraging companies to set up offshore," said Murphy.

The Peel Group is family-owned and run. Lancashire-born septuagenarian John Whittaker and his children own about three-quarters of the conglomerate. The remainder of the Peel Group is owned by the Saudi-based Olayan Group.

Whittaker, who is the director of hundreds of companies, rarely makes public appearances but when the Trafford Centre in Manchester opened in 1998, he abseiled down into the mall from the bridge of a mocked-up cruise liner.

Peel sold the Trafford Centre to CSC for £1.65bn in 2011. By taking payment in CSC shares, the group managed to legally avoid around £200m in capital gains tax.

Whittaker's company was listed on the Stock Exchange as Peel Holdings Public Limited Company in 1983. In 2004, after nearly two decades as a publicly-listed company, Peel Holdings was taken back into private ownership.

Being in private hands can have advantages for tax avoidance, says Murphy. "If you have a director, an owner, with a big appetite for risk then clearly you might take on a riskier tax position than you would do if you were the managing director of a company on the stock exchange who didn't want to feel that they had to stand up and justify their tax position in front of some angry journalists."

The Peel Group's tax arrangements have come under scrutiny before. Last year, at a meeting of the Public Affairs Committee at BBC's MediaCityUK office, chair Margaret Hodge said she was "concerned by the tax habits" of the Peel Group.

''The most profitable parts of the Peel group are managing to pay no UK corporation tax whilst those bits making less profits are at least paying some,'' said the MP who has heavily criticised Google, Starbucks and others. ''At the maximum they pay 10% tax. They do not pay their fair share of tax.''

The BBC rents the 200-acre waterfront MediaCityUK site from the Peel Group at a cost of £400m over the next 20 years. In a report last year, the Public Accounts Committee warned of "potential reputational risks for the BBC" as a result of this arrangement.

The report said that the BBC "should also make clear its expectation that, as an organisation funded by the licence fee, it expects companies with which it contracts to pay their fair share of tax".

Over the years, Peel Group projects in Britain have received hundreds of millions of pounds worth of EU and UK public subsidy, according to a report published last year by the Liverpool-based think tank, ExUrbe.

"The Peel Group does have "form" when it comes to successfully accessing public funding. Over the years, its projects on Merseyside and elsewhere have received hundreds of millions of pounds worth of EU and UK public subsidy, both in cash and in kind."

The report goes on to say that: "Tax avoidance, in a nutshell, is the use of legal means to reduce an individual's or an organisation's current or future tax liabilities. There is no doubt that Peel practices it."

The Peel Group has continually denied aggressively avoiding tax in the UK.

"All Peel operational businesses are UK-domiciled for taxation purposes and pay the appropriate level of corporation tax," a spokesperson told the Sunday Herald.

A spokesperson for Scottish Enterprise said: "We've worked with Peel in recent years to regenerate the Clyde waterfront which in turn has delivered over 23,000 new jobs and £4bn of existing or planned investment. Peel has and continues to play an important role delivering mixed-use development at Glasgow Harbour and contributing land to build the riverside museum."

Glasgow City Council said that it "does not have any ongoing procurement relationship with Peel".

"We are not responsible for administering or collecting corporation tax. However, the council is clear that, for any business, paying the appropriate level of tax is the right thing to do," a council spokesperson said.

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