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Nissan pays Revenue £37m

Nissan has paid the Inland Revenue more than £37m after the carmaker was accused of shifting profits from its UK factory to countries with lower tax rates.

The settlement is almost as much as the £45m Government grant given to Nissan this year and last to secure the future of its factory in Sunderland.

The Inland Revenue, which had threatened court action, is still investigating rival carmaker Honda on suspicion that its profits in the UK are too low because it undercharges its foreign subsidiaries for British-made cars.

Honda was hit by a similar investigation this summer by the Japanese tax authorities, who accused it of shifting Y25.4bn (£129m) of profits from motorcycles to its Brazilian subsidiary. Japanese tax officials have demanded an extra Y13bn of tax, which Honda said was 'totally unacceptable'.

Under its deal with the Revenue, Nissan's UK sales subsidiary surrendered £20m of tax losses, which would usually be set off against future profits, while the factory handed over £12.5m of tax losses and £4.5m in other payments.

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