Wolseley slopes off to Zurich in a move to slash its tax bill
Wolseley, the world's biggest plumbing, heating and building materials business, is joining the corporate tax exodus from the UK by relocating to Zurich.
The group, which is creating a holding company, New Wolseley, to be incorporated in Jersey with tax residence in Switzerland, joins a list of big name British businesses that have fled these shores in search of lower taxes.
And the group will in future hold its annual shareholder meetings in Zurich, a change which is likely to infuriate small shareholders.
Exodus: big name British businesses have fled these shores in search of lower taxes
Wolseley has been a British stalwart since the 1880s when its founder Frederick York Wolseley moved his mechanical sheep-shearing business from Australia to Birmingham.
It produced the Wolseley motor car, one of the most popular in the country in its heyday.
The Wolseley restaurant in London's Piccadilly, now a prime breakfast and lunchtime venue for City powerbrokers, was once its flagship motor showroom.
Chief executive Ian Meakins said: 'Far from being unpatriotic, we are doing exactly the right thing. The brutal reality is that if we did not, our shareholders-would get annoyed.' He added that UK investors could participate in annual meetings through a video link.
Wolseley will see its main tax rate fall to 28 per cent from 34 per cent as a result of the move, which would have saved it £23million in the last financial year.
The company generates 80 per cent of its income overseas and said it is acting because it is being hit by anti-avoidance rules in this country on profits earned abroad, which it claimed put it at a competitive disadvantage.
Meakins denied the relocation was a vote of no-confidence in the coalition's tax policies.
'It is not a political statement at all,' he said, adding it is not 'beyond the bounds of possibility' that Wolseley would move back if the regime changed.
The group also confirmed that former Imperial Tobacco chief executive Gareth Davis will become chairman in January. Further changes are expected in the medium term among its cadre of long-serving non-executives.
Davis already holds the chair at bookies William Hill.
Losses before tax shrank to £328million from £766million for the year to the end of July.
Net debt dropped to £346million from £959million, and the company said it will resume paying a dividend at the half year stage.
The shares fell 15p to 1,515p, and broker Panmure Gordon remains cautious because of the group's exposure to the troubled US housing market.
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