Ad agency threatens migration over tax

News Article - Tuesday, May 06, 2008

filed under: Regulatory

Further information

One of the UK's largest advertising agencies has announced that it is considering moving overseas because of the UK's tax regime.

WPP has stated that changes to the current tax system that would require businesses in the UK to pay tax on their foreign dividends earned overseas could cause it to leave the country.

According to WPP, it is looking into the possibility of moving its London headquarters outside Britain in protest at the government's decision, which will hit the company's profits hard.

Companies concerned about changes to the tax system affecting their business can invest in accounts software to help them manage their finances more effectively.

The move by the Treasury to tax overseas profits could also lead to other multinational groups deciding to relocate their headquarters, analysts have predicted. A number of firms, including drug maker Shire and United Business Media have already stated that they plan to move their bases to Ireland in order to reduce their tax bills.

WPP, which owns J Walter Thompson in the US, believes that changes to the way it is taxed could cost the firm tens of millions of dollars each year in additional taxes.

Ministers insist that any tax increases as a result of changes to the way in which foreign earnings are taxed will be offset by other alterations to the tax system.

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