Advertising giant WPP has said it is likely to switch its headquarters from Dublin back to the UK after UK chancellor George Osborne slashed corporation tax in last week’s budget.
WPP boss Sir Martin Sorrell revealed that the announcement of a greater than expected reduction and reforms to levies on profits collected overseas had tempted the firm to reverse its move to Ireland.
Sir Martin told BBC Radio 4’s Today programme: “There has to be legislation enacted … but I think it looks as though we will make that recommendation (to return to the UK).”
“We’ve looked at small print and releases,” Sorrell said in an e-mail today. “Subject to draft legislation and enactment we will recommend a return to U.K. to board and shareowners.”
WPP, the owner of ad agencies including Young & Rubicam Inc., Ogilvy & Mather and the Grey Group, left the UK for Ireland in 2008, citing the burden of taxation on foreign earnings. Media company United Business Media and drugmaker Shire also moved their tax bases to Ireland, while another media company, Informa, moved to Switzerland.
Unveiling Britain’s 2011 budget last week, Chancellor George Osborne indicated he would speed up a cut in corporate tax and move forward with plans to amend tax on overseas profit of UK companies. Osborne told BBC Radio 4 today that WPP was planning to move back to the UK
“Other countries are quite deliberately making their tax systems more competitive, and attracting multinational companies away from the U.K.,” Osborne said in his budget speech yesterday.
He pledged to change “complex rules” for controlled foreign companies and introduce a 5.75 percent rate on overseas financing income.
Sorrell also serves on an committee created by Prime Minister David Cameron last year to advise on business and economic strategy.
