Businesses threaten to quit UK over taxes

Chief executives at Diageo and Unilever have warned that their firms would consider relocating if the government refuses to make the tax regime more business friendly.

The UK could lose some of its highest earning companies if the government continues to penalise them through taxes, according to two high profile business leaders.

The government 'should not take us or any other multi-national company for granted', said Paul Walsh, chief executive of Diageo, while his counterpart at Unilever Paul Polman,  also said his firm may be forced abroad.

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Comments
bookmarklee's picture

What a lot of sabre rattling

bookmarklee | | Permalink

100 of the FTSE 100 companies have someone at the top who would like corporate and income tax rates to be lowered in the UK

Of these, 70  "are considering whether to stay in London or move their main operations outside the UK". 

They are 'considering' such a move. What this means is that the Chairman or CEO would like their FD or accountants to tell them what moving their main operations outside the UK would involve.  Once they find out they will cease to be 'considering' it. Instead they will conclude (albeit reluctantly) that their main operations will remain within the UK. The prospect of more than handful ACTUALLY relocating is negligble.

As the FDs will invariably advise their bosses, to relocate central management and control out of the UK has to be more than a paper exercise. And it is not something that can be arranged overnight. For most (all?) companies in the FTSE 100, such an exercise would take 3-5 years to complete.

I doubt that many FTSE 100 companies are seriously in the process of making detailed arrangements to "move their main operations outside the UK" ahead of the election. Others may start the process but will back off once they realise what's really involved.  I'm quite sure that the majority of those who have expressed a view on behalf of their company have yet to be briefed on the practicalities.

Mark Lee

www.TaxAdviceNetwork.co.uk

Businesses are quitting...

markfd | | Permalink

...others will scaling back their plans or not coming here at all.  It's not just the tax rate, it's the relentless anti-business attitude of the state and the mainstream media.  Glaxo even had to publicly rebuke HMRC for their oppressive behaviour.  It's also the poor educational standards, the "I'm owed a living" attitude of many and the fact that most of the s*** hasn't even hit the fan yet.

enough already !

oldersimon | | Permalink

Could I call for a moratorium on the "we'll leave the UK if you're not careful, and then you'll be sorry" stories ?  They don't bear any relationship to reality and the sight of the very well off throwing their toys out of the pram become increasingly repellent.

Totally agree with Simon

Anonymous | | Permalink

For every one of these stories I'd like to see a companion piece that says this business does not want to contribute to the society it has benefited from- it doesn't want to pay for the education of the people who come to work there, it doesn't want to pay for the hospitals that keep its staff in work, it doesn't want to pay for the infrastructure that keeps business moving and it doesn't want to pay for the police that ensures its operations are carried out in a civil environment.

I'd also like to see follow-up stories in 12 months to see how many of these businesses actually moved but then the media are largely only interested in rehashing quotes from whatever the business lobby say rather than questioning what they say. And how many of those that do move actually move their operations? It is essentially moving its headquarters for tax reporting purposes and not the operation itself.

12 months?

pauljohnston | | Permalink

I think Mark and other posters are being niave.  For a company to re-locate it takes several years of planning but what we need to look at is that Companies are expanding abroad but not in the UK.  Whilst we can accept that it is not in the next 12 months that movement will take place when it does we loose the Tax Revenues and employment from that point forward, perhaps never to return.

The warning is there and we all now that our tax take is too high when compared with other countries. It is now up to us to decide whether this is acceptable or has to change.

FRom my point of view the higher we tax the less incentive there is to expand or work harder.  I am all for reducing the burden and for the country/ state to reduce its take so to encourage entrepreuners and other risk takers the opportunity to reduce our growing burden of those not being able to work

The election that will take place in the next 4 months will decide which way we go..

 

 

.

Anonymous | | Permalink

Several of my top earing clients are all seriously considering moving overseas.  They are £300k-£1mil per annum profit clients and so pay a phenominal amount of tax with the 50% rate coming in.

The business for all three we have discussed this in earnest with can be operated from any worldwide location.

The general feeling is to plan to move but to wait and see what the first year of Conservative rule brings.

It takes time to decide to relocate, but if these people are not wanted in the country, there are other places you can go and pay a lot less tax when you deal with a knowledge business.

You have to remember than the top 1% of earners pay about 25% of the total income tax in the country. 

Lots of others hovering around the £100k and £150k thresholds have decided to not bother and take more holidays, myself included.

 

More holidays?

HudsonCo | | Permalink

Perhaps the government have a secret agenda of improving work/life balance by encouraging people to take more holidays like this? Once the bills are paid it sounds like a good idea to me.