Two More Companies Escape UK Tax Net
Very few nations make the mistake of taxing business income earned in other jurisdictions. This policy, known as worldwide taxation, makes it difficult for a nation's companies to compete in global markets — particularly if the government also has a high corporate tax rate.
The United States unfortunately is guilty of both a high tax rate and worldwide taxation, as is the United Kingdom. The difference between the U.S. and UK, however, is that British companies at least have the freedom to redomicile in places with better tax law.
And that is exactly what is happening, as reported by Tax-news.com:
The trickle of firms renouncing their residency in the UK for tax purposes has now increased to a steady stream after two more companies revealed plans to relocate their corporate HQs offshore. On Thursday, Charter, the London-based engineering group, announced proposals to change its corporate structure involving the creation of a new holding company in Jersey, to be called Charter International PLC, but with its head office and tax residence in the Republic of Ireland. While the company will remain listed on the London Stock Exchange, its new corporate HQ will move to Dublin. ...The move is seen as further evidence of ... increasing dissatisfaction with the international tax regime compared with jurisdictions such as Ireland, and especially the Treasury's plans to impose tax on foreign profits to discourage multinationals to send profits to low-tax jurisdictions to avoid UK corporate tax.
...Meanwhile, Regus, the world's largest provider of services office space, has revealed plans to shift its corporate headquarters from the UK to Luxembourg in what appears to be another tax-related relocation. Like Charter, it has also decided to form a holding company in Jersey.
...These announcements have come hot on the heels of news that fund firm Henderson is to defect for tax reasons, capping another bad week for the under-fire government of Prime Minister Gordon Brown which has copped much flak recently over its dithering over tax policy and its desperation to raise new revenues amid a weak economy. Lloyd's of London insurer Brit Insurance has also confirmed that "it is actively considering the issue of tax domicile." ...Earlier in the year, Shire, the pharmaceutical firm, and United Business Media, both announced plans to redomicile in Ireland.
