TUI paid no corporation tax in UK

ThomsonBritain's biggest travel company paid no UK corporation tax in its last financial year despite posting record annual profits.

Thomson and First Choice operator TUI Travel said it had been a year of "many successes", with an 8% leap in underlying pre-tax profits to £390 million.

But its UK corporation tax bill was zero as a result of losses incurred following a restructuring launched five years ago. It said it would start paying tax again once those losses have been carried forward and that it was paying the "right amount of corporation tax" in the countries in which it operates.

TUI said it was "fully compliant with UK tax law", adding that it expects to pay small amounts of UK corporation tax in 2013/14 with significantly larger amounts in later years as brought forward losses are eliminated.

In the latest results, the company said the package holiday was enjoying a "renaissance" as customers opted for the certainty of all-inclusive deals rather than DIY trips. It also reported strong demand for holidays next year as households look to avoid a repeat of last summer's wash-out UK summer.

However, like-for-like prices of holidays could rise by up to 2% next year as it faces up to cost pressures - such as higher fuel - of up to 10% in 2013.

Price hikes and sales of more profitable package deals helped buoy the annual figures, with TUI seeing strong bookings for "unique" holidays, targeted at groups including couples and those looking for luxury all-inclusive resorts.

TUI added it was benefiting from difficulties at its rival Thomas Cook, which last week revealed plans to slash a further £100 million in costs after suffering pre-tax losses of £485 million.
Chief executive Peter Long said the year had been one of "many successes". He added: "We have delivered record group profits, while the UK achieved outstanding results both in terms of profit and margin all against a backdrop of continued economic uncertainty."

UK holidaymakers looking to escape to the sun after this year's dismal summer also resulted in a surge in bookings for next summer, up 12%. TUI said its unique holidays - including Couples, Sensatori and SplashWorld - were already up 18% for summer 2013, accounting for 83% of bookings.
Read Full Story