Some of Britain’s biggest listed companies, including several that have threatened to redomicile abroad, paid little or no corporation tax in Britain in 2007.

Research by The Times shows that FTSE-100 companies – Cadbury, Standard Chartered and British American Tobacco, which have a combined market capitalisation of £75 billion, employed almost 11,000 UK staff and generated more than £6 billion in global profits, – paid zero corporation tax in Britain last year.

Although there is no suggestion of impropriety, the research indicates that some of Britain’s biggest and best-known companies contribute startlingly little to the Exchequer in corporation tax. Most of the companies earn the bulk of their profits overseas, meaning that they also pay most or all of their taxes outside the UK, allowing them to offset these against domestic tax liabilities. In some cases, this allows them to pay no British corporation tax at all.

Other large UK-domiciled firms that pay little tax qualify for exemptions that are, for example, linked to scientific research. Nevertheless, the study will fuel the debate over whether the Government should reform the way in which British-based companies are taxed on their overseas income, or whether doing so would have a corrosive effect on the economy by driving jobs and investment offshore.

Richard Murphy, an accountant with Tax Research UK, who contributed to the research, believes that the system is in urgent need of reform. He said: “Why does the UK have a tax structure where you can have significant operations in the UK but pay all your tax overseas? We have an extremely generous corporate regime, which needs to be reexamined if this is the case.”

A spokesman for Vodafone, which has 18 million UK customers, said that the company refused to be drawn into the debate over relocating and emphasised that even though the company had paid no UK corporation tax in 2007, it had done so in previous years and made other tax payments.

Mr Murphy cited Rolls-Royce, the jet-engine maker, which employs 22,900 of its 38,600-strong global workforce in the UK but paid only £13 million in British taxes last year because the majority of its £733 million pretax profit was earned from overseas sales. Rolls-Royce, which says that it has no plans to relocate overseas, pointed out that its UK manufacturing and research operation was costly.

However, Mr Murphy said: “This cost structure is inevitable, but international rules for pricing within a group of companies allow for this and should usually result in tax being paid where the profit is generated. I’d usually expect that to be where most of its people are, especially in an R&D-based company.”

Several of the companies in the survey, composed of groups that were known to pay comparatively little UK corporation tax, emphasised that they had made a significant contribution in other ways, such as through the payment of stamp duty, business rates, employee income tax and national insurance. They noted that suppliers and British-based companies that service them make large tax contributions.

Some companies, such as Shire, the drugsmaker, and United Business Media, have announced their intentions to move to the Republic of Ireland. Others, including WPP, the advertising group, AstraZeneca, the drugsmaker, and Cadbury, the confectioner, have threatened to do so if proposed government changes to the UK tax regime do not go their way.

Ken Hanna, the chief financial officer of Cadbury, said: “We are confident that the final legislation will be pragmatic and sensible. Every company has to be extremely mindful of shareholder value. If it doesn’t turn out the way we hope, then it’s something that we would discuss with the board.”

A spokeswoman for BAT, the twelfth-biggest company in the UK by market value and the owner of the cigarette brands Lucky Strike and Pall Mall, said that its head office operated at a loss and that 99 per cent of its profits were earned overseas. She said that the company welcomed the Treasury’s decision to examine the UK’s tax laws.

A spokesman for SABMiller, the brewing group, which paid less than £100,000 in corporation tax in Britain last year, said: “We have a very small commercial operation in the UK that employs about 70 people and is only a developing business. All other profits are taxed at source.”

WPP said that it paid a higher rate of tax on its UK profits than its overseas profits and that its British tax bill was relatively small because so little of its profit was earned in the UK. WPP’s accounts reveal that almost 10 per cent of its workforce is located in the UK.