02 Oct 2008
There could be an acceleration of businesses moving to Ireland, a leading tax professor has warned, after FTSE 100 media giant WPP announced plans to move its tax domicile this week.
Mike Devereaux, director of the Oxford University Centre for Business Taxation, said the process in businesses identifying tax as a catalyst for moving offshore is straightforward.
While unable to speak on behalf of individual companies, he said Ireland is
its attractiveness to UK-based companies.
‘Not only does it have a 12.5% tax rate but it doesn’t have a controlled foreign companies regime so it’s easier to do what you want in the rest of the world,’ he said.
He said while there is a possibility some clarification could be gleaned from the upcoming pre-budget report, the likelihood is not great, as the Treasury is still actively consulting with business.
‘It hasn’t reached a likely conclusion yet. Businesses are pressing for something to be in the finance bill for 2009 but the government isn’t promising anything at the moment,’ he said.
Devereaux’s comments come in the wake of advertising network WPP announcing plans to relocate its headquarters to Ireland, citing the need for a more desirable tax regime. A large percentage of its operations are already conducted abroad.
Martin Sorrell, chief executive at WPP, has acted as an ambassador for
WPP paid £204m in tax last year, but none of it in the UK because of tax allowances from previous years, according to the company’s annual report.
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