UK tax changes 'luring multinationals'
07 May 2013
Posted by: Author: Irish Independent
Source: Irish Independent
THE UK chairman of a major international accounting firm says he personally knows of a substantial number of multinationals that are seeking to relocate to Britain due to the country's more competitive corporate tax regime.
This follows a series of changes to the UK's corporate tax environment resulting in more competition for Ireland in the race for foreign investment.
Advertising and marketing companies WPP and UBM both recently decided to relocate their global headquarters back to London from Dublin.
Steve Varley, chairman of Ernst and Young UK and also managing partner of the global accounting firm's Irishpresence, told the 'British Telegraph': "I know of more than 40 multinational companies that have been looking to undertake global and regional headquarter relocations into Britain.
"Mr Varley said there had been "real progress on the British ambition to become one of the most competitive corporate tax regimes in the G20".
Britain's Chancellor George Osborne has made lower corporation tax a centrepiece of the Conservative/Liberal Democrat coalition government's policy.
In the UK's most recent budget, the Chancellor announced that Britain's corporation tax would fall by an additional 1pc to 20pc by April 2015. This compares with a 28pc rate in 2010.
Ernst and Young Ireland tax head Kevin McLoughlin says there is no doubt that the UK's tax changes have enhanced its appeal for foreign companies, an appeal that was already strong given the country's market place of 60 million people.
However, he says recent moves by some Irish-based companies is not evidence of a trend.
He says the changes to the UK tax regime have most benefited UK parent companies whose subsidiaries make their profits overseas, who felt forced to move their headquarters from the UK but are now considering returning to Britain.
Mr McLoughlin says Ireland has not traditionally attracted these types of companies – UK parents of multiple foreign subsidiaries – and instead gets most multinational investment from employment-driven companies who want to base their actual operations here.