TaxCorporate TaxA Pru move would not hurt tax take

A Pru move would not hurt tax take

The Treasury would not lose out even if Prudential moved out of its London HQ, says Bill Dodwell

MOVING PRUDENTIAL’S headquarters out of London would have little impact on the Treasury’s tax take, according to a senior tax advisor.

Despite Prudential considering moving out of its London headquarters due to concern over new capital requirement rules, Deloitte head of tax policy Bill Dodwell said a move would be unlikely to harm UK tax receipts.

“There will be a modest change, but I doubt it would change significantly,” said Dodwell.

If Prudential moved, then the Treasury would lose out on the stamp duty reserve tax on the trading of its shares. A smaller UK operation would impact on PAYE, as well as some VAT and business rates.

However the cost of running the UK head office, which tends to make a loss and is offset against profits, would lessen. If Prudential borrow in the UK to make an overseas transaction, then the interest cost can also be offset against tax. However, it is unclear whether such transactions have taken place.

The biggest impact on the UK would be non-tax related, Dodwell added. Instead, the economic drain from the HQ not buying UK services and products would have the biggest negative effect.

Prudential’s underlying tax rate on profits for 2010 was 21%.

Related Articles

Professional privilege battle reaches Supreme Court

Corporate Tax Professional privilege battle reaches Supreme Court

7y Kevin Reed, Writer
Video: Accountants lose privilege appeal – what next?

Accounting Firms Video: Accountants lose privilege appeal – what next?

7y Accountancy Age, Reporters
LPP decision was, regrettably, obvious

Corporate Tax LPP decision was, regrettably, obvious

7y Mark Lee
Court battle rages over legal privilege for tax advisers

Corporate Governance Court battle rages over legal privilege for tax advisers

7y Kevin Reed, Writer
Advisers still face taxman's demands after Pru court loss

Corporate Tax Advisers still face taxman's demands after Pru court loss

8y David Jetuah, Reporter
High Court backs HMRC sting on tax planning advice

Corporate Tax High Court backs HMRC sting on tax planning advice

8y David Jetuah, Reporter