WPP May Swap Britain For Ireland To Lower Tax Bill

by Jason Gorringe, Tax-News.com, London

01 October 2008

In another blow for the UK's government it is expected that WPP, the second largest advertising and marketing group in the world, will this week reveal plans to relocate its headquarters to Ireland in order to lower its corporate tax bill.

The news comes just one week after three other major UK corporations announced their decisions to consider quitting the UK for tax reasons, and will deepen the long-running argument between businesses and the government over how multinationals are treated for tax purposes.

It is believed that WPP, which does 90% of its business in foreign countries, is making their move in protest at the ongoing uncertainty surrounding the UK corporate tax regime, especially in the area of international taxation, with new plans for taxing multinationals' overseas profits having been put on ice by the government after strong objections from influential business leaders.

The company paid GBP204m in tax alone last year, and predicts that the proposed changes to the current corporate tax regime will end up costing them millions more.

Although every announcement by a company to leave the UK and set up domicile elsewhere has been unwelcome news for the UK Treasury, this one is particularly embarrassing as WPP's chief executive, Martin Sorrell has previously acted as an ambassador for British business.

The Treasury is now hoping other UK-based corporations will not look upon such a decision by WPP as the way forward.

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