Top firms pay less tax on profits
BRITAIN'S biggest companies are paying a third less tax today than they were two years ago after some of them shifted operations overseas.
The percentage of profits they pay in tax has fallen from 35.8 per cent in 2009 to 26 per cent, research from accountant UHY Hacker Young has found.
The tax rate has fallen even as profits have risen.
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UHYsaid there were three main reasons for the fall – cuts to corporate tax rate, companies moving headquarters overseas and the fact more and more are generating a higher proportion of their sales abroad. This allows them to take advantage of lower tax rates in other countries.
Companies who have moved their headquarters overseas included Shire, WPP and United Business media, all of whom have gone to Dublin.
Although WPP is returning to the UK, UHy tax partner roy maugham warned that the taxman could still risk driving others offshore if he squeezed them too hard.
He added that “government’s relentless tinkering” with the tax system had also made the UK a less atttractive place to do business.
