According to a report in the FT this week, at least 20 multinationals are planning to move their regional or global headquarters to the UK within the next year as a result of the Government’s efforts to increase the competitiveness of the country’s business tax policy.
If the moves go ahead, they would create around 2,000 highly paid jobs and generate several hundred million pounds of extra corporate, employment an consumption tax revenues.
The Government has made a determined effort to improve the business financial environment after a number of companies moved out of the UK in 2008.
Chancellor George Osborne announced in the budget this year that he would take corporation tax to 22 percent over the next three years and the Exchequer Minister to the Treasury, David Gauke, pitched the idea of the UK as the place to do business to US firms during a recent visit to Washington.
The US is currently the largest source of companies thinking of moving to the UK, even though the Internal Revenue Service (IRS) has recently made it harder for US companies to change their domicile. While it is rumoured that firms in Europe and Asia are also interested in relocating.
However, while the relocation of global headquarters makes the headlines, it is often the moves of regional headquarters that make the money, as they frequently include relocating large departments, such as marketing and distribution, thereby involving large numbers of people rather than a few top-flight executives.
Other Government initiatives to bring foreign business to the UK include a new tax break for patent income, new rules on foreign profits, tax-deductible interest costs and the lowering of the personal tax rate from 50p to 45p.
Rob Chedzoy specialises within providing tax planning advice, support and guidance to owner-managed businesses.