| High taxes force companies overseas |
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| Written by Tom Clougherty | |
| Monday, 27 November 2006 | |
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According to a CBI (Confederation of British Industry) of 87 senior executives from Britain’s largest businesses, nineteen top British companies moved part of their operations overseas in the last two years and five are considering moving their headquarters overseas in the near future. The reason was clear - high corporate taxes are making Britain an increasingly unattractive place to do business. Richard Lambert, director-general of the CBI, told the Financial Times "In today’s world of global markets, companies have many more choices to make about where to invest their capital and their talent. Business tax is one of the most important considerations that firms have to take into account, and it is easily measured." It is no wonder that Britain is coming out of these considerations poorly. The basic rate of corporation tax is 30% in the UK, compared with just 12.5% in Ireland. The effects are plain to see. Colt Telecom recently announced it was moving to Luxembourg, Omega and Hiscox (two Lloyd’s insurers) moved to Bermuda - where their tax bill will be cut by 50%. Last year Royal Dutch Shell decided to become tax-resident in the Netherlands, and Experian (a credit analysis business) relocated its headquarters to Dublin. HSBC, the world’s third biggest bank, sparked concerns in the City last month when they revealed it could save £400 million a year by leaving the UK. Over-taxation of corporate profits is driving business overseas. This will damage the British economy, costing jobs and growth. In the long run over-taxation will result in reduced revenue as profitable industries leave Britain. The Treasury should take note. |
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