UK firms eye offshore tax havens

KPMG survey reveals more firms are becoming disillusioned with the UK's tax burden

Bonney: Further action to stop firms deserting the UK is needed fast

More firms are considering leaving UK shores due to anti-competitive tax rates, according to the latest figures from KPMG.

A survey which polled 50 of the UK’s largest businesses revealed that 14 per cent of respondents in 2008 were actively considering moving their tax residence out of the UK. This is a six per cent increase on the number of firms that considered upping sticks in 2007.

Sue Bonney, head of tax at KPMG Europe, said: “In last year’s tax competitiveness survey, we cautioned that the UK was at a tipping point and was in danger of losing jobs and investment because of its tax laws.

"Since then, we have seen a number of companies leave the UK and tax competitiveness become an increasingly high priority for the authorities and government.

Bonney added that if the trickle of companies leaving is to be prevented from becoming a flood, further action is needed, and quickly.

“We have now seen the draft legislation on the exemption of foreign dividends and there were welcome words in the pre-budget report about moving to a ‘territorial’ system of taxation – in other words no longer seeking to tax profits earned overseas which is a major bugbear for business – but what we need now is evidence of real progress on how to achieve this,” she said.