UK drugmaker moves tax domicile to Ireland

[Mugu]

By Salamander Davoudi and Andrew Jack in London, FT.COM

Shire, the FTSE 100 pharmaceutical group, on Tuesday dealt a blow to the UK as a corporate location by announcing it was moving its tax domicile to Ireland.

While the group’s operations will keep its headquarters in the UK, the holding company will be incorporated in Jersey, and pay reduced tax on global earnings in Ireland, where the headline corporate rate is just 12.5 per cent.

Shire, which generates the majority of sales outside Britain, declined to say how much it expected to save by the move. It paid £9m in UK tax in 2006, of which £4m was corporation tax.

Richard Lambert, CBI director-general, said in response to the move: “We are particularly worried that an uncompetitive corporate tax system is spoiling the UK’s attractiveness as a place to do business, and that other... firms will follow Shire’s path.”

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