WPP IS TO RETURN to the UK after a four-year self-imposed tax exile in Ireland.
In an announcement made today to the stock exchange, the advertising giant stated that the legislation in the 2012 finance bill relating to foreign profits was the driving force behind its decision.
The rules, set to come in from January next year, will only see tax imposed when profits leave the UK, with profits moved between developing countries and tax havens untouched by UK taxes.
WPP originally moved its tax base to Ireland – where corporate tax is paid at 12.5% – in late 2008, citing the UK’s corporation tax regime. Although it did little to affect jobs in Britain or in Ireland, it was seen as a blow to the UK’s attractiveness to investors, with United Business Media and pharmaceuticals company Shires following WPP’s lead shortly afterwards.
While the advertising house’s return is likely to have a negligible impact on jobs, it is a coup for the coalition government, with the company’s interim statement stating there will be “no tax cost to the group by returning its headquarters to the United Kingdom … at least for the life of this government”.
The statement went on: “The decision to return to the United Kingdom has already been approved by the board and will require share owners’ consent at an EGM planned for early December 2012.”
MTD represents 'the single most significant change to the UK’s system of taxation in recent times', says Knill James partner Nick Rawson. So, how prepared are SMEs for digital tax reporting?
The SME community voices concern about the chancellor's measures in the Spring Budget
Following chancellor Philip Hammond’s Spring Budget speech, we explore the key takeaways for businesses and individuals
Unincorporated businesses under the VAT threshold given an extra year to prepare before MTD becomes mandatory