Wolseley planning Swiss tax move
Building and heating materials group Wolseley has announced plans to set up a new holding company in Switzerland in order to reduce its corporate tax bill.
The firm, which generates 81% of its revenues overseas, said the new company would help the group "achieve a competitive corporate tax rate".
Wolseley also reported revenues for the year to the end of July of £13.2bn, down from £14.4bn a year earlier.
However, losses were reduced to £328m from £766m a year ago.
This was largely due to a fall in operating costs of £353m and a stronger trading performance in the second half of the year.
"Demand across our markets remains mixed and the economic outlook continues to be unclear," said the group's chief executive Ian Meakins.
"Whilst we remain cautious about the outlook for our markets, we are confident that Wolseley will make good progress in the year ahead."
The Swiss move will help the firm to reduce its corporate tax rate from 34% to 28%, said finance chief John Martin. Based on the last financial year, this would equate to a saving of £23m, he added.
Mr Martin said the company felt it was being "taxed twice" under UK Controlled Foreign Company (CFC) rules, which force it to pay tax on its overseas earnings.
A spokesperson for the Treasury said: "The government is committed to reform of the CFC rules and will introduce new rules in 2012.
"Any changes will deliver a more territorial approach, refocusing on artificially diverted UK profits and exempting genuine commercial activities.
"The government's long-term aim is to create the most competitive corporate tax system in the G20 [group of leading economies]."
Wolseley is the latest in a long line of companies that have moved, or threatened to move, overseas in order to save tax.
Publishing group Informa moved to a Swiss tax base last year, while advertising giant WPP, investment firm Henderson, Shire Pharmaceuticals and United Business Media have all moved their tax residence to the Irish Republic.
Drinks group Diageo and consumer goods company Unilever have also threatened to quit the UK over tax.