.png)
.png)
The proportion of companies considering moving their tax residence out of the UK has more than doubled since 2007, according to KPMG.
The financial services group’s third annual survey of the country’s tax competitiveness has found that 14% of firms are mulling a move overseas – more than twice the percentage from the previous year’s study (6%).
Fifty of Britain’s largest businesses were quizzed prior to November’s Pre-Budget Report, which included the announcement of the Government’s intention to exempt foreign earned dividends from UK tax.
This, however, appeared to do little to change the minds of those considering migrating. Following the PBR, companies who had said they were actively planning leaving the UK were asked if they would reconsider.
Only one of the seven firms that responded seemed even remotely open to a change of heart, saying it would reserve judgement on a move.
Following the results of its 2007 survey, KPMG warned that the UK was in danger of losing jobs and investment because of the nation’s tax laws.
The company’s European head of tax, Sue Bonney, said that ‘there were welcome words in the Pre-Budget Report about moving to a “territorial” system of taxation… but what we need now is evidence of real progress on how to achieve this’.
There are some indications in the KPMG study results that the UK tax situation has improved from big business’ point of view.
Almost two thirds of respondents (64%) agreed that the Varney review of tax policy has resulted in better consultation with business.
And the proportion of firms citing ‘lack of open and effective consultation with tax authorities on new legislation’ as an influence on not expanding in the UK has dropped to 36% from 58% last year.
Chris Morgan, head of international corporate tax at KPMG, remarked: ‘What we need now is a clear understanding of how the controlled foreign company rules – which tax certain foreign profits automatically in the hands of a UK parent – will be amended, so we can have a true territorial system’.
