TaxCorporate TaxExit barriers raised for large companies

Exit barriers raised for large companies

Revenue acts to keep large companies in the UK

The prospect of large listed companies abandoning the UK for countries with
lower tax rates has prompted HM Revenue & Customs to close a tax-avoidance
loophole.

The new rules – contained in the Finance Bill – will stop companies that are
incorporated in the UK, but based elsewhere for tax purposes, from escaping the
impact of anti-avoidance laws known as the controlled foreign company (CFC)
rules.
These rules impose taxes on income earned in tax havens and low-tax countries.
Until now, companies have been able to get round the CFC rules by acquiring
‘shell’ companies that were exempt from the rules.

This tax structure has been adopted by a small number international
companies, the FT reported.

Anneli Collins, a partner of KPMG, said: ‘What the Revenue wants is to stop
major UK plcs from getting out of the UK.’

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