IT IS a multi-national company that rakes in billions of pounds in profit every year.

British American Tobacco (BAT), which has a base in Southampton, increased its operating profits to a whopping £5.97 billion according to its latest financial results.

But despite the mind-boggling sum, the cigarette giant doesn’t pay a single penny in corporation tax in the UK – a revelation that has outraged MPs and business leaders across the south.

BAT, which employs around 60,000 staff globally, including 1,000 at its research lab in Millbrook, is one of 12 of the UK’s biggest companies that paid no tax at all here last year – despite selling more than 700 billion cigarettes across the globe.

MPs have called on the Government to crackdown on multinational firms avoiding tax.

Southampton Itchen MP John Denham said: “It’s hard to believe that British American Tobacco doesn’t really make profits from its business activities in the UK.

“Good British firms are paying their fair share in corporation tax, but it’s not fair that huge multi-national companies are not.

“It can take far too long to get international agreement on sorting this out. That’s why Labour has been talking to British businesses about how the transparency of revenues, profits, and taxes paid that’s needed could be delivered here in the UK.

“There has been a lot of talk from the government on tax avoidance, but no action.

“It’s about time we saw leadership on this issue.”

Hampshire Euro MP Sharon Bowles, who chairs the European Parliament’s Economic Monetary Affairs Committee, added: “In an age of austerity, when the ordinary man in the street has to pay all his tax, we should be making sure corporates pay their fair whack and in the right place.”

Chief executive at Hampshire Chamber of Commerce, Jimmy Chestnut, said he was unable to comment until he had spoken directly to BAT bosses.

A spokesman for British American Tobacco PLC said: “We pay our taxes where we make our money.

“Our share of the market in the UK is approximately seven per cent and any profit we make through our UK subsidiary is cancelled out once you’ve taken into account the operating costs for our headquarters, our offices in Southampton, Aylesbury and in other parts of the UK.

“We pay taxes in accordance with the laws of all the 180 countries in which we do business and we follow a policy of full disclosure with all tax authorities – regardless of which country they’re in.

“In 2011 British American Tobacco paid £1.447 billion of corporation tax to governments around the world and collected and paid over £30.7 billion of sales and excise taxes to governments.”

* THE eight per cent rise in profits enjoyed by British American Tobacco in 2012 has been attributed to booming sales of Lucky Strike.
The brand flew off the shelves in western Europe and Latin America, as BAT’s operating profits fell just shy of the £6 billion mark.
Sales of Lucky Strike, which was made famous in hit US show Mad Men, increased by some 11 per cent last year, placing it well ahead of the cigarette giant’s top three brands Dunhill, Kent and Pall Mall, which saw sales improve by around three per cent.
The four brands now account for more than a third of BAT’s sales.
But it wasn’t just cigarettes that proved popular with smokers.
Like most of its rivals, BAT also saw a rise in sales of its rolling tobacco, as smokers try to save money by rolling their own.
European sales of rolling tobacco rose by eight per cent, with demand continuing to soar in the UK, as well as in Spain, Germany, Italy and the Netherlands.