Wolseley to keep tax base in Switzerland

By This Is Money
Updated: 04:28 EDT, 30 March 2011

Wolseley, the world's biggest builders and plumbers merchant, is in no rush to move its tax residence back to the UK after George Osborne's moves to stem the exodus of companies by improving the treatment of profits earned overseas in the Budget.

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The company shifted to Zurich three months ago, reducing its corporate tax rate to 30% from 34%, and expects to shave off a further 2-3%.

Chief executive Ian Meakins said: 'Our move was not solely about lower rates of tax but also about certainty and simplicity over the tax system. We think Osborne's direction of travel is the right one and we will look at the legislation when it comes out.'

Wolseley has been a British stalwart since the 1880s but makes four-fifths of its income overseas.

Meakins, who was paid £1.94m last year, said some directors' remuneration was paid through Switzerland and added: 'No-one on the board has gained as a result.'

Sir Martin Sorrell's WPP Group, which moved its tax residency to Dublin, has already indicated it may return to the UK following the Budget move.

Wolseley, up 65p to 2154p, was the second biggest riser in the FTSE after it reported a profit of £195m for the half year to the end of January, bouncing back from a £261m loss in the same period last year.

It re-instated the dividend, which has been suspended since 2008, with a payment of 15p a share.

Meakins said he is concerned over the UK economy: 'In the last couple of weeks, we've seen a little bit of a slowdown, and a drop in consumer confidence.'

But he added: 'We are not worried about a double dip.'