This was listed in "Economic Shorts" yesterday.
It is indeed a worrying development.
If more of this happens we will not only be
stuck with Brown's legacy of mountainous debts
but also with nobody left to pay them off.
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TELEGRAPH 2.5.09
Why Informa's Swiss move should send a shiver down our spines
Informa's decision to move its tax residency and parent company to
Switzerland will please its shareholders but it should worry the rest
of us.
By Damian Reece
After seeing the detail of last month's Budget, Peter Rigby,
Informa's chief executive, concluded he had no choice but to put a
stop to the Treasury increasing its take of his shareholders' money.
By moving to Switzerland he can avoid paying at least £10m in
additional tax. For a company that made £86m in 2008, that's material.
If Rigby hadn't moved the company, the board would have found someone
who would. Huge numbers of jobs won't disappear to the Alps, or
anywhere else, as a result of similar corporate moves by the likes of
WPP, Shire and United Business Media, but the Treasury won't be
generating as much tax as it planned.
Given the state of this country's finances, these corporate
developments are hardly helpful and point to a more worrying trend.
What Informa and the others have shown is that it's relatively easy
for UK companies to sidestep new taxes. It proves that threats by UK
companies are not empty.
But it's not just the cash. Informa's going as well because of the
complexity of the UK tax system and its uncertainty. Its gripe is to
do with the taxation of profits from its overseas businesses. The
Budget had some apparent concessions in this area (not the right ones
for Informa) but those that were published only delayed problems, not
solved them. These other threats still lurk.
But Rigby and his board were searching for additional attributes when
seeking a new location for their parent company. "Global
connectivity . . . location . . . time zone" were all cited, all
things that the UK has claimed as its chief advantages. Clearly when
you add on our loopy tax system other countries now hold sway.
But the final feature offered by Switzerland these days that the UK
does not is a "highly stable political and economic environment".
Given the political meltdown we're witnessing while enduring economic
hardship, it's not hard to see why Rigby intends to move from cloud
cuckoo land to the land of the cuckoo clock for a bit of stability
and certainty.
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