THE CHIEF EXECUTIVE of advertising firm WPP has said that it is likely to move back to the UK because of the measures announced in yesterday’s budget, and publishing firm UBM is considering following suit.
Sir Martin Sorrell told the BBC that it “looks as though we will make the recommendation” to return to the UK from Ireland.
WPP, which is the second largest advertising company in the world, moved its headquarters to Dublin in 2008, citing the UK rules regarding controlled foreign companies (CFCs) as the reason for the move. This was worth £50m to £70m to the company, Sir Martin said.
Chancellor George Osborne announced that he would be cutting corporation tax by 2% from next month, rather than the expected 1%, bringing the rate down to 26%.
He also changed cut the rate for foreign financing companies to 5.75%, down from the expected 10%. This was part of ongoing reforms to CFC legislation, which will be announced in May.
Sir Martin said: “It will take some time for legislation, later this year or early in 2012.”
He said the move of the parent firm back to the UK would take place “pretty soon thereafter”.
UBM, which also moved to Ireland, last week refuted suggestions it would move back to the UK. However, chief financial officer Robert Gray said on Wednesday: “In the light of the reform proposals, UBM is actively considering whether to relocate its corporate tax domicile to the UK.”
Osborne told the BBC: “We have got big companies like WPP coming back to the UK, that is going to help us with the growing economy.”
Research also finds that 84% of businesses believe that the government has not provided enough information about digital tax plans
A total of £16bn was lost through tax fraud last year, according to estimates released by Pinsent Masons
Additional tax a result of compliance investigations by HMRC, but overall revenue falls
Firm expands East Anglian team with appointments to the audit practice and private client tax team