Mediaboss Marketing

10 May 2012 Last updated at 19:00 ET

Major UK-based firms cut secret tax deals with authorities in Luxembourg to avoid millions in corporation tax in Britain, the BBC's Panorama has found.

The programme obtained confidential tax agreements detailing plans to move profits off-shore to avoid what was a 28% corporate tax rate at the time.

Those involved include pharmaceutical giant GlaxoSmithKline (GSK) and media company Northern & Shell.

Both firms told the programme they have a duty to be tax efficient.

In the case of GSK, the UK-headquartered firm set up a new company in the tiny European tax haven of Luxembourg in 2009.

Because of the veil of secrecy surrounding all these decisions around tax...we, on behalf of the taxpayer, cannot be certain that this was a good, honest, proper deal

In 2010, the new subsidiary lent 6.34bn to a GSK company in the UK.

In return, the UK company paid nearly 124m in interest back to the Luxembourg subsidiary - effectively removing that money from the UK company's profits.

That move meant the money was no longer available to tax in the UK at 28%.

Read more from the original source:
UK companies cut secret tax deals