Aon is to become the first ever US S&P 500 company to become domiciled in the UK after the insurance broker unveiled plans to shift its headquarters from Chicago to London.
Why are they doing that? First, because we now won't tax them on their worldwide income. Not just, as in the US, if they don't bring it here, but even if they do bring it here. And second, Tory laws are encouraging companies like Aon to come to the UK and use tax havens by saying they may set up their whole treasury function - tho which much of their profit may be allocated - in a friendly tax haven like Jersey and we'll tax it in the UK, but only at 5.75%.
This is Tory tax haven policy - to make the UK a centre for the abuse of global capitalism at cost to the ordinary people of this country who will gain nothing from this move because Aon won't be contributing hardly a bean for making use of the UK as the centre of its global non-taxation.
And what do the Tories get from this? Wait for the directorships to roll. Osborne won't be in No. 11 for that long and the City of London will no doubt reward him handsomely (as it did Blair and Mandelson) when he retires to their pleasant pastures.
And so much for Osborne's talk of rebalancing the economy - all he's doing is bringing in more finance.
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A little more on this ‘our hubris, your nemesis’ on Krugman blog: (both 15th Jan 2012), ‘The Great Gatsby Curve’ and ‘But The Top 0.1 Percent Isn’t Diverse’.
You appear to indicate that countries operating a territorial system of taxation are unusual. It isn’t.
But that’s at cost to ordinary people and at gain to capital and so I want to change it
Haven’t you got it yet that I want to stop abuse or ordinary – whoever does it?
Yet the trend has been for industrialised countries to move to territorial systems in recent years – and the US is seriously considering it. It is not perfect but I suspect US will move towards territorial with a spread of tax payment on repatriated profits.
Taxing repatriated profits is not a territorial tax system
What else can you expect when politicians are motivated by career rather than conviction? The interests of the electorate don’t figure.
So our government wants the UK to become world leaders in allowing the corporate elite to evade paying fair taxes in whichever country those taxes may be owed. This isn’t good for Britain or British jobs , it’s despicably selfish and short-sighted behaviour !
Regardng the HS2 rail link. This is a slight departure from the subject matter, but has it been confirmed that this will be paid out of wholly government expendture or not? Or, more likely, will it become yet another PFI-style gravy train for their mates in the city?
There doesn’t seem to have been any confirmation of how it will be paid for.
The US anti-inversion law stops a US company from expatriating unless it has substantial business in the target country.
However the move will deliver substantial tax benefits.
Nonsense
Residence based tax does that
I am talking about s7874 of the IRC and the avoidance of anti-deferral rules – why is that nonsense.
However I would be interested in your view how residence based tax (per se) prevents a move of corporate HQ purely for tax reasons???
It doesn’t by itself
You always need rules to stop abuse
Which is why you mix source and residence bases with CFC rules and transfer pricing controls
You need an armoury to stop abuse