By Daniel Hunter
Ernst & Young have said that they are aware of over 40 multinational companies who are looking to undertake global and regional headquarter relocations into the UK.
At least 20 are expected to complete in the next 12 — 18 months, and if all of the significant transactions complete this year, they will generate around £1 billion of additional annual tax revenues.
Further to that over 2,000 high value jobs would be created in the UK workforce.
“Based on the work we are doing with clients, the UK seems close to achieving its ambitions of becoming one of the most competitive corporate tax regimes in the G20," John Dixon, Ernst & Young’s UK head of tax commented.
"We know of more than 40 multinational companies that are looking to undertake global and regional headquarter (HQ) relocations into the UK, with 20 expected to complete in the next 12 to 18 months. And the momentum is building.
“These transactions are at an advanced stage and, if they all complete, would generate over £1bn of additional annual tax revenues and over 2,000 high value senior management jobs. And that’s a conservative estimate; the employment figure is likely to be even higher, as they will also need teams and support services.
“While the public’s attention has largely been focused on global HQ domestications, these are the tip of the iceberg. The real transformational change that is taking place is around regional HQ transactions; when a large multinational moves part of its operations to the UK. These transactions are almost invisible to the public eye, but they are where the real energy is; they can be transformational to the UK economy in a very material way.
“Tax reform is an incredibly powerful way of changing global corporate behaviour. These transactions are the culmination of a whole package of measures, rather than a single policy. The Controlled Foreign Companies (CFC) reforms; changes to the headline rate of corporation tax; and a patent box regime that encourages intellectual property to stay in the UK, are all starting to have a real impact on the UK’s attractiveness as a place to do business. It’s sending out a very clear message - Britain is open for business.”
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