Treasury Wants WPP to Come Home

Chancellor George Osborne is working hard to persuade Sir Martin Sorrell to move WPP's tax base back from Ireland to the UK, according to reports in the Daily Telegraph.

WPP currently collects just under nine tenths of its revenues overseas. The firm made the move to Ireland in September 2008 when the Labour government increased taxes on overseas profits, and Sorrell had already hinted - during the run-up to last year's general election, that he would consider moving back if the Conservatives took power and implemented a pledged system that only taxed profits generated in the UK.

According to the Telegraph (www.telegraph.co.uk ), the Treasury is now promising a 'reformed' rules on controlled foreign companies (CFC rules), with 'interim improvements' in Wednesday's 2011 Budget. A fuller rewrite would then follow in spring 2012, recognising Tory thinking that rules should exempt 'commercially justified activities that both business and HMRC agree do not erode the UK tax base'.

The paper says the Treasury-WPP talks have been in progress more than six months, but as yet have not resulted in any commitment from the marketing services giant.

Other firms approached in the same manner reportedly include former NOP owner United Business Media (UBM), and the Informa group.

Web sites: www.wpp.com and www.hm-treasury.gov.uk .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.