Britannia Radio

From The Sunday Times

April 11, 2010

Tycoon Jim Ratcliffe flees UK to save £100m tax

The founder of Britain’s biggest firm says it can no longer survive here

Jim Ratcliffe's wealth has been heavily hit by the recession, falling from £3 billion to £150m

Danny Fortson and Jack Grimston

ONE of Britain’s most successful post-war entrepreneurs is to move to Switzerland to escape Gordon Brown’s tax regime and save his company £100m a year.

Jim Ratcliffe, 57, has built Ineos, the chemicals group, into Britain’s largest private company by buying up old businesses cast off by companies such as BP and the old ICI during the past decade.

Now Ratcliffe and about 20 other senior executives believe they must leave Britain if they are to repair the company’s finances. Ineos was badly hit by the recession and is struggling to cut £6 billion of debts.

The move, which will cost the Treasury hundreds of millions of pounds, has been approved by a group of banks owed money by Ineos. Its lenders include two banks bailed out by the British taxpayer — RBS, which is 84% owned by the state, and Lloyds, 41% of which is in public hands.

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The departure of Ratcliffe and Ineos will add to the election row over whether Labour is damaging Britain’s attractiveness as a location for business.

Ratcliffe joins a string of wealthy figures who have quit Britain because of high taxes. They include Guy Hands, the City financier, and Lewis Hamilton, the Formula One driver.

Ratcliffe lives in Beaulieu, in Hampshire, in a gated property that he bought 10 years ago, with stables, a swimming pool and a half-mile-long drive. It is not yet known where he will live in Switzerland.

Other companies that have moved their headquarters overseas include Shire, the pharmaceuticals group, and WPP, the advertising giant, which have both decamped to Ireland.

A recent poll by The Sunday Times found that half of Britain’s top 30 companies had considered moving their tax base offshore.

Businesses have been pushed out by a steady stream of new taxes. These include the 50% top tax rate, which took effect on April 6, the £30,000 levy on non-domiciled taxpayers and the cut in pension tax relief for those earning more than £130,000. Firms have been further angered by a threat from HM Revenue & Customs to tax more of their income earned overseas.

Hands, whose firm Terra Firma owns EMI, the record company, said recently he had not set foot in Britain since his move last April and had “no intention of doing so until I have been out of the UK for at least three years”. He has not even visited his wife, children or parents who live at the “former family home” in Kent.

Ratcliffe’s corporate difficulties have hit his personal wealth hard. His fortune peaked at an estimated £3.3 billion in the 2007 Sunday Times Rich List, in which he was ranked 10th. In this year’s list his wealth has plunged to £150m.

Ineos, founded by Ratcliffe in 1998, hit the headlines in 2008 when it was involved in a bitter dispute at its Grangemouth refinery on the Firth of Forth over its attempt to close the final salary pension scheme to new workers.

The installation was briefly closed down, disrupting petrol supplies for much of Scotland and northern England.

Ratcliffe is a runner, skier and windsurfer and last year took part in a charity expedition to walk to the North Pole along with his sons George and Sam. He and the boys’ mother, Amanda, have parted.

Other ventures by Ratcliffe include the £30m refurbishment of Lime Wood, a country house hotel in the New Forest which reopened last autumn. He also owns a hotel in Courchevel, France.

Papers newly filed at Companies House show that in the past 10 days a number of senior executives, including Ratcliffe, have resigned from the board of Ineos’s UK holding company and several subsidiaries.

Meanwhile, a new holding company has been registered in Switzerland.

When the company first mooted the idea of leaving Britain last month, it said such a move could save it £400m in tax over the next four years.

It has £30 billion of annual turnover and last month sold a chemicals business based in Runcorn, Cheshire, for £220m to help to cut debt.

Ineos has said previously that it would remain “committed to its UK operations”, regardless of where its corporate headquarters was located. It employs 3,700 workers and another 1,000 contractors in Britain out of a worldwide workforce of 15,500.

Its operational base is in Lyndhurst, Hampshire, near Ratcliffe’s home.

One insider said: “He and the executive team are moving to Switzerland to manage the new holding company.”