Financial Directors look to move offshore

13/10/2008

According to a survey commissioned by Deloitte, there has been a significant jump in the number of UK companies seriously contemplating moving their headquarters to less expensive tax regimes.

The survey of financial directors revealed that 29% were considering relocating their tax base abroad. Only 13% were considering moving in the second quarter of this year. The survey showed that the general outlook amongst financial directors had deteriorated faster this quarter than at any point in the global slowdown.

A spokesperson at Deloitte said that many more FDs were taking drastic cost-cutting measures and pursuing strategies including dividend cuts and outsourcing.

Another survey by KPMG showed that UK corporate taxes remain higher at 28 per cent than the global and EU average of 25.9 per cent. The EU average was even lower at 23.2 percent. The 'Global Corporate and Indirect Tax Rate survey 2008' published by KPMG showed that corporate taxes in the EU have fallen year-on-year by one per cent.

The latest flurry of corporate departures from the UK were largely caused by the vagueness of the government's policy in relation to profits on foreign operations.

Chris Morgan, head of international corporate tax at KPMG, commented that the debate was not if foreign profits ought to be taxed in the UK at the current rate, but "whether they should be taxed in the UK at all?"