Asda and Morrisons paid no corporation tax last year in the wake of their private equity buyouts.
The pair paid an average of more than £200m of corporation tax a year between then in the decade preceding their acquisitions.
However, as they made losses last year – mostly due to large interest payments on the debts loaded onto their balance sheets – no tax was due, The Sunday Times reported.
Last year, rival Tesco paid £247m in corporation tax whilst Sainsburys paid £120m.
Asda was acquired in 2020 by billionaire brothers the Issas, who made their fortune from EG Group. The deal saddled Asda with £4.8bn of debt.
It made a pre-tax loss of £74m last year, as it racked up £395.5m of finance costs, which include the interest payments on its debts.
Morrisons, which was bought by CD&R in 2021 for £7bn leaving it with £6.6nm of net debts, made a £1.3bn pre-tax loss last year as it paid £406m on financing costs.
Over the previous decade, Asda paid £1.2bn in corporation tax while Morrisons paid £836m.
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Despite not paying corporation tax last year, Asda paid around £1.5bn in business rates, national insurances and other taxes, while Morrisons made around £1.25bn.
The owners of the supermarkets did not take any dividends.
An Asda spokesman told the newspaper: “Last year Asda chose to reduce its profitability and invest significantly to support customers during the cost-of-living crisis.
“Asda’s operating profit declined by 25% and the business earned only 1.7p for every pound spent with it.”
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