British-based retailer and owner of B&Q home stores, Kingfisher, has
announced this week that it is giving serious consideration to moving its tax
domicile overseas.
In a month peppered with disappointment for the UK's government, Kingfisher's
news has struck a serious blow, and should the decision go ahead it would stand
as one of the highest-profile relocations for a British company seeking
refuge from the UK's corporate tax conditions.
Currently, the company - which is the UK’s second-biggest non-food retailer,
and the third largest in the world - is in the early stages of considering its
move, and has drafted in PricewaterhouseCoopers, its auditor, to help examine
its options.
It is understood at present that the company is looking at an overseas move
as a last resort, and had described a move as being "more in sorrow than
anger", towards the economic climate in the UK. However, they have made
it clear that despite their sadness about having to relocate, they hold the
needs of their shareholders as their highest priority.
The company have also factored in that, due to the majority of their sales
coming from countries outside of the UK, the move may be more practical in terms
of financial expansion.
Kingfisher's announcement is not the first to rock confidence in the UK's
corporate climate. Late last month, Henderson Group plc confirmed that it is
considering a potential change in its tax domicile from the UK to the Republic
of Ireland.
The asset management firm issued the statement on the back of recent speculation
that Brit Insurance, the Lloyds of London firm, is examining the possibility
of redomiciling overseas for tax purposes.
In addition to this, Regus, the serviced office provider, and Charter, the
engineering group, have also relocated their tax bases to either Ireland or
Luxembourg in a bid to lessen their corporate tax burdens.
According to a report from the Telegraph this week, the severity of the situation
is such that the Confederation of British Industry (CBI) has called upon the Chancellor
to sharpen the tax regulations surrounding UK-based multinational companies
who generate revenue both inside and outside of the country.
Despite a recent cut in the rate of UK corporation tax by 2% to 28%, a number
of other firms in the FTSE 250 have also announced plans, or are said to be
reviewing plans, to leave the UK in the light of growing uncertainty about its
corporate tax regime, particularly with respect to tax on international profits.
TAX-NEWS.COM
Free Tax-News Feed