A week after the Financial Secretary to the Treasury reiterated the UK's strategy for enhancing its attractiveness as a venue for international business Wolseley plc announced its proposed migration to Switzerland. The group pointed to savings in its effective tax rate and the lack of progress on CFC reform. This must have been discouraging for the Government. A phased reduction in the corporation tax rate is in the pipeline and the Government is consulting with business on interim reforms to the CFC rules in 2011 as a ‘down payment’ to wider reform in 2012. Wolseley's decision might be a special case but there must be a concern that it will prompt other UK companies with predominantly overseas operations to (re)consider migration.
UK tax policy is to compete mainly with our larger G20 trading partners most having some form of CFC regime. The UK is not looking...
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