Budget 2011: WPP likely to return tax HQ to UK, it says
- 24 March 2011
- From the section Business
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.
"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.
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.
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.
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.
"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".
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.
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.