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Polymers and petrochemicals group Ineos is considering a relocation of its headquarters and tax residence from the UK to Switzerland.
The company said potential cash tax savings of €450m between now and 2014 could be made if it went ahead with the move, which would need the consent of its lenders.
Tom Crotty, chief executive of Ineos, said the change of tax residence to Switzerland would allow Ineos to “increase investments to the benefit of all stakeholders in our business”.
He added: “We have to make a decision that is right for Ineos, our businesses and our sites, to ensure we remain competitive long-term in a global marketplace. Many leading chemical companies have European or global operations resident in Switzerland and we need to compete effectively with them.”
Ineos said its day-to-day operations in the UK and locations around the world would remain unaffected by the plan. The group employs 15,500 people across 64 plants in 14 countries, with 70% of its revenue coming from outside the UK.
Earlier this week, a report by the One Hundred Group of FTSE 100 Finance Directors claimed that the UK's largest companies gave over half of their gross profits to the Government in taxes in 2009.
According to the survey, carried out by PricewaterhouseCoopers for the One Hundred Group, the total tax contribution of FTSE 100 businesses rose to 41.6% of total earnings in 2009 from 38.2% in 2008.
The main rate of corporation tax in the UK is set at 28%. According to the One Hundred Group report, the corporation tax payments of those surveyed fell 6.4% to £10.3bn (€11.4bn) but other taxes on business do not decline with profitability.
The report authors found that for every £1.00 of corporation tax collected, survey particpants paid a further £1.27 in other taxes. The companies also collected a further £3.89 in tax on behalf of the Government.
The Ineos announcement is part of a trend of UK-based companies considering or making a move out of the UK because of tax rates they claim are too high.
Diageo, the alcoholic drinks maker, is also currently considering moving out of the UK; advertising giant WPP, publishing group Informa and office rental company Regus have already done so.
Last August, UK-headquartered household and consumer products maker Reckitt Benckiser also said it was considering shifting its tax residence out of the country.
The Confederation of British Industry (CBI), which represents the UK's leading businesses, said the One Hundred Group findings showed that the UK Government needed to rethink its policies.
Richard Woolhouse, CBI head of tax and fiscal policy, said: "The Government must ensure that it promotes economic recovery and increasing the tax burden on companies does not support this objective."
From:http://www.europeanplasticsnews.com
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