Tesco has decided not to sue the Guardian over its allegations of UK corporation tax avoidance, and has accepted the newspaper’s offer of an apology and damages instead. The newspaper had wrongly reported that Tesco was avoiding up to £1bn in a corporation tax avoidance scheme involving windfall profits on sale and leaseback of its UK stores.
It now says: “We now accept that these damaging allegations were unfounded and should not have been published. All profits generated by this sale and leaseback arrangement were earned by UK tax-resident companies and have been or will be included in Tesco’s UK tax returns. The use of Cayman Island companies in the scheme was for legitimate stamp duty savings purposes. We also accept that Tesco’s responses to the charges were truthful.”