TAXING MATTERS: Vivienne Westwood — and her company — have defended the way they pay taxes following a story in The Sunday Telegraph that suggested the designer was avoiding paying money to the British government.

The paper, citing the company’s accounts, said the designer pays 2 million pounds, or $3 million, each year to a company in Luxembourg for the right to use her name on the fashion label. It suggested that by doing so she was avoiding paying 500,000 pounds, or $754,300, in UK taxes annually.

This story first appeared in the March 11, 2015 issue of WWD. Subscribe Today.

All figures have been converted at exchange rates for the periods to which they refer.

The paper also pointed to a 300,000 pound, or $452,580, contribution that Westwood made to the Green Party, which vowed last month to crack down on tax havens and tax avoidance.

“I am concerned at the allegation in the papers,” Westwood said in an email to WWD. “It is important to me that my business affairs are in line with my personal values. I am subject to UK tax on all of my income.

“My personal donation to the Green Party reflects my desire to see a more equitable and sustainable society. I remain fully committed to the Green Party and will be doing all I can to ensure that they achieve success in the general election.” The next general election in Britain is due to take place in May.

Westwood’s company said in a separate statement there are no illegal issues involved, and no one is being taken to court.

Vivienne Westwood Limited is part of an independent, international group of companies operating in Europe, USA and Asia. Latino SA (based in Luxembourg) is the holding company of this group, which owns and protects the Vivienne Westwood trademarks worldwide.

Vivienne Westwood Limited pays regular royalties to Latimo SA pursuant to a license agreement. Vivienne Westwood Limited and all the companies belonging to the group pay all the required taxes in all the countries in which they trade or operate, in accordance to audited financial statements.

All British entities based in the UK paid the required taxes. Within the UK, Vivienne Westwood Limited paid GBP 780,228, or $1.22 million, of taxes in 2013, and GBP 1,250,858, or $1.98 million, of taxes in 2012. Profits, as per the decision of the Board of Directors, were invested in the structure and in the international development of the company.

The donation of GBP 300,000 to the Green Party was made by Dame Vivienne Westwood personally and not by the Vivienne Westwood Group.

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