Two of the UK's biggest insurers - Prudential and RSA - could be next on the list of companies considering relocating their headquarters to other countries in order to cut the tax expenses they currently face in the country.
It is believed that RSA, who is the UK's second biggest general insurer, is hatching plans to adopt a new headquarters in Ireland, whilst Prudential will favour either Ireland or Amsterdam for its new domicile. The development follows news earlier in the week that banking giant HSBC is also giving serious thought to a move away from the UK.
So far this year, Alliance Boots has quit Britain for Germany and Shire for Ireland. Meanwhile, several other major UK businesses have announced their intention to move, with British-based retailer and owner of B&Q home stores, Kingfisher, announcing just two days prior to Wednesday's RSA/Prudential news that it is also giving serious consideration to moving its tax domicile overseas.
Earlier this month, the Confederation of British Industry (CBI) called upon the government to reconsider their proposals for corporate tax reforms, pointing out to them that the number of companies keen to flee the UK will only increase as the uncertainty surrounding the country's tax regime continues. These reforms include the contentious plans on the taxation of overseas profits, which were shelved by the Treasury earlier this year after UK plc raised loud objections to their tough anti-avoidance provisions.
The battle between the UK's government and corporations has been viewed by some as a no-win situation. Whilst the Treasury doesn not want to lose revenue from corporations who relocate, it has mortgaged itself up to the hilt and cannot afford to deplete its coffers further through tax giveaways to the corporate sector - a move which in any event would be unlikely to endear the government to the electorate at a time when many are struggling to meet their own mortgage payments.
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