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Budget 2011: WPP likely to return tax HQ to UK, it says | Budget 2011: WPP likely to return tax HQ to UK, it says |
(about 1 hour later) | |
Advertising firm WPP is set to move its tax headquarters back to the UK after proposed changes in the Budget. | Advertising firm WPP is set to move its tax headquarters back to the UK after proposed changes in the Budget. |
Chancellor George Osborne unveiled unexpected cuts in corporation tax, and said he would alter the taxation regime on profits earned overseas by UK firms. | Chancellor George Osborne unveiled unexpected cuts in corporation tax, and said he would alter the taxation regime on profits earned overseas by UK firms. |
"I think it looks as though we will make that recommendation [to return to the UK]," WPP boss Sir Martin Sorrell told BBC Radio 4's Today programme. | "I think it looks as though we will make that recommendation [to return to the UK]," WPP boss Sir Martin Sorrell told BBC Radio 4's Today programme. |
WPP moved its parent company from the UK to the Irish Republic in late 2008. | WPP moved its parent company from the UK to the Irish Republic in late 2008. |
At the time Sir Martin said it was "a very difficult decision", made "in the interest of shareholders". | At the time Sir Martin said it was "a very difficult decision", made "in the interest of shareholders". |
WPP had said its prime reason for moving its HQ to Dublin was because of the UK taxation on profits earned outside the UK. | WPP had said its prime reason for moving its HQ to Dublin was because of the UK taxation on profits earned outside the UK. |
The firm, the second biggest advertising company in the world, makes 90% of its profits overseas. | The firm, the second biggest advertising company in the world, makes 90% of its profits overseas. |
Now, in a move to attract firms back to the UK, Mr Osborne has promised to reform the taxation on profits collected overseas. | Now, in a move to attract firms back to the UK, Mr Osborne has promised to reform the taxation on profits collected overseas. |
Sir Martin said it meant that he, as well as WPP's chief finance officer and tax officer would be putting a proposal to the company's board to return the parent firm to the UK. | Sir Martin said it meant that he, as well as WPP's chief finance officer and tax officer would be putting a proposal to the company's board to return the parent firm to the UK. |
If the board agreed, then shareholders would then also have to give their approval. | If the board agreed, then shareholders would then also have to give their approval. |
'Growing economy' | 'Growing economy' |
"It will take some time for legislation, later this year or early in 2012," Sir Martin said. | "It will take some time for legislation, later this year or early in 2012," Sir Martin said. |
He said the move of the parent firm back to the UK would take place "pretty soon thereafter". | He said the move of the parent firm back to the UK would take place "pretty soon thereafter". |
Speaking to the BBC about his tax changes, Chancellor George Osborne said: "We have got big companies like WPP coming back to the UK, that is going to help us with the growing economy." | Speaking to the BBC about his tax changes, Chancellor George Osborne said: "We have got big companies like WPP coming back to the UK, that is going to help us with the growing economy." |
When WPP moved its parent company to the Republic of Ireland the vast majority of its staff remained in the UK. | When WPP moved its parent company to the Republic of Ireland the vast majority of its staff remained in the UK. |
But Sir Martin said at the time of the corporate move overseas that it had been worth £50m to £70m a year in profits to the firm. | But Sir Martin said at the time of the corporate move overseas that it had been worth £50m to £70m a year in profits to the firm. |