Taxing times

IT IS a testament to Britain's open and flexible economy that firms can leave this country's embrace as easily as they can enter it. And the latest company to take advantage of this is Wolseley, the building-supplies firm, which has announced it is to move its tax base from the UK to Switzerland in an attempt to reduce its outgoings.

It is less of a tribute to Britain's welcoming nature, however, that Wolseley, like several companies before it, is shifting its tax arm in protest at legislation that forces firms to pay tax on their overseas earnings.

It is also ironic that rules which were designed to boost revenue for the UK Exchequer will actually result in less money coming in. Wolseley may still be based in this country, but far less of its tax will now be heading the Treasury's way.

With so many firms still looking anxiously at their bottom line, this is a trend that will continue – several other companies are already threatening to follow suit – unless the Government takes action.

All the indications are that some reform is on the cards, yet speed is of the essence. For not only does David Cameron need to realise that Britain is fast losing its global appeal to multinational firms, but

he should also be noting the lesson that the more draconian the tax legislation, the lower the actual tax take is likely to be.