In March 2021 Ethical Consumer viewed the John Lewis Partnership Annual Report 2020. This contained a list of the company's subsidiaries. These included:
- Admiral Park Retail Management Limited, incorporated in Guernsey
- JLP Insurance Limited, incorporated in Guernsey
Both of these companies were considered high risk of being used for tax avoidance, as they were listed as providing 'Property Holding' and 'Insurance', and based in jurisdictions considered to be tax havens.
However, in August 2019 Ethical Consumer received an email from John Lewis which clarified the company's tax policy:
"A John Lewis Partnership spokesperson said: “Paying taxes arising from our activities is an important part of how we contribute to the societies in which we operate. As such, we do not use tax avoidance strategies. Our 2019 Annual Report and Accounts lists the subsidiaries which contribute to the overall profitability of the Partnership. We also submit a country by country report to HMRC.
"Admiral Park Retail Management Limited, incorporated in Guernsey, is a property holding company which owns the freehold of the Admiral Park Waitrose store site in Guernsey. The entity does not provide management services and has no revenue. JLP Insurance Limited operates in Guernsey because of the self- insurance expertise they have on the island and any profits it makes are entirely taxable in the UK through the Controlled Foreign Company regime.”
"Additional background on contributing to the UK tax system (see page 21 of the 2019 Annual Report & Accounts)
"In 2018/19 the Partnership paid taxes of £379m. Key contributions were:
- Business rates: £179m
- Employer NICs: £118m
- Corporation tax: £33m"
The above statement was considered an adequate explanation of why the company owned the subsidiaries considered by Ethical Consumer to be high-risk and located in jurisdictions on Ethical Consumer's list of tax havens at the time of writing.
Other subsidiaries were listed in Guernsey and in Jersey. However, these were listed as 'food retailing' and the company had Waitrose food retail shops in these jurisdictions. Although these were located in territories on Ethical Consumer's list of tax havens, they were considered to be low risk of being used for tax avoidance purposes as they were assumed to be serving the local population.
One further subsidiary located in a territory on Ethical Consumer's list of tax havens, John Lewis Hong Kong Limited (Hong Kong), was also listed. However the activity of this subsidiary was stated to be "sourcing company", therefore the company was not considered to be a high risk company type for the likely use of tax avoidance strategies.
As the company provided a narrative for its high risk subsidiaries, listed two further ordinary subsidiaries which were assumed to be serving the local population, along with one further ordinary subsidiary based in Hong Kong, the company received Ethical Consumer's best rating for likely use of tax avoidance strategies and lost no marks in the Tax Conduct category.