James Halstead tax tweet case ends with charity donation
BURY flooring group James Halstead has settled out of court after being sued for tweeting that French-owned rival Tarkett had paid no tax.
Neither side are commenting on the case but they made a joint contribution of £50,000 to the BBC’s Children in Need campaign last week.
In a statement relating to the donation, chairman Geoffrey Halstead said: “Though, on a daily basis, we are relentless competitors I am pleased that we can, on this day, put aside our rivalry and contribute together to this worthy cause.”
The legal action stemmed from a tweet issued from the account of James Halstead subsiary Polyflor last December. It was part of a conversation discussing the lack of tax paid by Starbucks and linked to a document titled “The Starbucks debate” prepared by James Halstead’s finance director Gordon Oliver.
It said Polyflor paid tax of £18m in 2009-11 and claimed Tarkett Ltd did not pay anything. As well as comparative trading figures it included commentary on the fact that many flooring businesses are incorporated overseas which, “offers tax planning opportunities that, while legal, raise interesting moral issues”. Mr Oliver added: “It does raise the question of whether there is a level playing field”.
According to court papers Tarkett, based in Kent, claimed the tweet was defamatory as it was read by a “very substantial” number of people working in the flooring industry. At the time of the tweet Polyflor had around 800 followers. Tarkett’s lawyers denied “an elaborate tax avoidance scheme” in a letter sent to James Halstead in February.
They said: “It (Tarkett) has paid no UK corporation tax because in 2008 our client generated a tax loss of £6.5m in relation to a restructuring scheme. This triggered a large tax deductible loss that is being realised against profits. This is the reason why our client has not paid UK corporation tax in these years. It is not because of some elaborate tax avoidance scheme which has been diverting profits in Luxembourg.”
Tarkett is a subsidiary of Tarkett SA, a French-registered company which is owned through a holding company co-owned by the Deconinck family and various private equity funds affiliated with Kohlberg Kravis & Roberts (KKR). The Tarkett group generates around €2.3bn sales annually. In the year to June James Halstead had sales of £217m.
