UK tax could incite corporate flight
A move that would raise taxes for multinational companies in Britain has stirred up a fury. Giant advertising firm WPP says it may pull its headquarters out of Britain. Others could do the same. From London, Stephen Beard reports.
WPP Annual Report cover (wpp.com)
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Renita Jablonski: WPP, the world's second largest advertising firm, says it may pull its headquarters out of Britain. The company is the latest threatening to walk because of high taxes. Stephen Beard reports.
Stephen Beard: Taxes are never popular. But this one's infuriated some of Britain's biggest companies. The plan is that businesses based in Britain would pay more U.K. tax on their foreign earnings. Companies that make a lot of their profits overseas could be hit hard. WPP is one such company. The advertising group, which owns J Walter Thompson in the States, reckons it could face an additional tax bill of tens of millions of dollars a year. WPP's boss, Sir Martin Sorrel, says he may pack up and leave the U.K., and dozens of other giant corporations could do the same.
Martin Sorrel: These are very significant companies that pay far more money than we do, and the loss to the Treasury could be significant. And it will be a dent in the image of London as a financial center.
Other companies like Glaxo, Vodafone, BP and Shell have also reportedly warned of a corporate exodus out of Britain if the tax plan isn't scrapped.
In London, this is Stephen Beard for Marketplace.
