What a load of sabre rattling: guest blog

Posted on

Mark Lee of the Tax Advice Network mailed me about the story that 30 UK large companies have looked at leaving. As he put it:

All of the top 30 companies in the UK  who would like corporate and income tax rates to be lowered in the UK

Of these, half  "have looked at shifting their tax base offshore". And a handful "are actively considering such a move."

They have 'looked at' this. Of course they have. What this means is that the Chairman or CEO asked their FD or accountants to tell them what shifting their tax base offshore would involve.  Once they found out they decided it was not practical - other than the 'handful' which are 'considering' it. The vast majority will of course conclude (albeit reluctantly) that their main operations will remain within the UK. The prospect of more than 1 or 2 ACTUALLY relocating is negligible.

As the FDs and accountants will invariably advise their bosses, to relocate central management and control out of the UK has to be more than a paper exercise. And it is not something that can be arranged overnight. For these top 30 companies, and indeed all substantial groups, such an exercise would take 3-5 years to complete.

I doubt that even a handful of these top 30 companies are seriously in the process of making detailed arrangements to move their main operations outside the UK ahead of the election. Others may start the process but will back off once they realise what's really involved.  I'm quite sure that the majority of those who have expressed a view on behalf of their company have yet to be briefed on the practicalities. Or they are just sabre rattling.

There's a further clue as to the lack of detailed plans given that the Sunday Times report that 15  companies said "that they were keeping their tax domicile status under review". Once they have consulted with their accountants they will find that companies don't have a domicile status.

Mark is a former chair of the Tax Faculty at the Institute of Chartered Accountants in England and Wales, which is an important point. You don’t have to be seen to be radical to think that what’s going on here is nothing more than posturing to secure political advantage. Anyone with their eyes wide open can see that.


Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:

You can subscribe to this blog's daily email here.

And if you would like to support this blog you can, here: