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.
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