Companies to flee UK over tax crackdown

UK companies could leave the country by their dozens to escape chancellor
Gordon Brown’s clampdown on tax avoidance, according to the Financial Mail.

Senior partners at Big Four firms told the Financial Mail that they were
working with large corporations to shift their base offshore in order to skirt
the rapidly changing tax rules in the UK. A number of FTSE100 companies are
understood to be considering the option.

One of the major insurers at Lloyd’s of London, Hiscox, is believed to be
planning such a move to Bermuda, where it has recently set up a new operation.
Hiscox is said to be planning the begin the process in the Autumn when it will
approach shareholders. Rival insurer Catlin has already made such a move.

The Netherlands and Ireland, where tax incentives have been introduced, are
other attractive destinations.

‘A lot of UK tax is paid by relatively few companies and many of those have a
choice about where they site their operations,’ Richard Collier-Keywood, head of
tax at accountants PricewaterhouseCoopers, was quoted as saying. ‘Lines between
illegal tax evasion and legitimate tax avoidance have become muddy.’

Anneli Collins, senior tax specialist at KPMG, said if one company took the
step then others would follow.