Business Roundup for Spain and the UK

Hot stuff INNOVATIVE BITES will not have to pay HM Revenue & Customs £472,928 (€550,17) in sales tax on its Mega Marshmallows.

Judges decided that the marshmallows were sold and purchased “specifically for roasting”, unlike confectionery which is “normally eaten with the fingers” and is subject to 20 per cent VAT.

HMRC argued that this could also apply to Mega Marshmallows, insisting that the tribunal was mistaken in not having given “sufficient weight” to the means of eating, as normal-sized marshmallows paid VAT at 20 per cent.

Little by little LEGAL teams representing the parties involved in the Naturgy takeover by Abu Dhabi’s Taqa are considering two options.

The first centres on a direct offer from the government-controlled holding company for 100 per cent of the Spanish energy company which reported a €2 billion net profit in 2023.

The second involves buying the individual stakes of just over 20 per cent owned by CVC Capital Partners and Global Infrastructure Partners (GIP), with whom Taqa has been negotiating for weeks, before acquiring the remainder.

Sources close to the deal believe the latter is most likely as it is the least complicated.

Thames turmoil DESPITE fears that Thames Water could collapse, the company intends to pay out dividends of around £2 billion (€2.3 billion) over the next 11 years.

The company has now submitted a revised business plan to water regulator Ofwat, but spread sheets that were seen by the Telegraph revealed that it still intended to pay shareholders up to £290 million (€337.4 million) annually.

Senior industry figures were “stunned”, the Telegraph said, to learn that Thames Water planned to continue investor payouts “during a time of turmoil.”

Pulp non-fiction MADRID-BASED Energia y Celulosa Company (Ence) recorded a €9.5 million profit in the first quarter of 2024 thanks to increased pulp prices.

There was also a significant reduction in costs over the last financial year, enabling the company to continue the upward trend that began in the last quarter of 2023, Ence announced on April 22.

Strong demand helped to push up prices, which reached $1,380 (€1,289) in Europe by the end of the first quarter of 2024, Ence explained, returning to the levels reached at the end of 2022.

Inheritance tax bonanza THE UK’s HM Revenue & Customs has received £7.5 billion (€8.7 billion) in inheritance tax (IHT) over the 12 months ending in March 2024.

This was £400 million (€465.3 million) more than the during the previous year, prompting official forecasts that government income from death duties could reach £9.5 billion (€11.05 billion) by the end of this decade.

Earnings from IHT have risen in recent years after the threshold was frozen at £325,000 (€378,065) until 2028 to prevent the tax from rising along with inflation and requiring families to pay out more on legacies.

Meanwhile the Chancellor, Jeremy Hunt, is hearing constant calls to abolish IHT and insiders have revealed that the government considered scrapping the tax in the 2023 Autumn Statement but instead chose to reduce National Insurance contributions.

Telefonica takeover TELEFONICA now owns 96.85 per cent of its German subsidiary, Telefonica Deutschland.

The company announced on April 23 that it had acquired 74.33 million shares – approximately 2.5 per cent of Telefonica Deutschland’s share capital and voting rights – for €175 million, paid entirely in cash.

The Spanish multinational had initially hoped to secure the 5.65 per cent which it did not already own for €395 million, but eventually settled for 2.5 per cent.

This was Telefonica’s second Telefonica Deutschland takeover offer, following a €1.48 million outlay on increasing its holding from 71.81 to 93 per cent in November 2023.