Thursday, July 03, 2014


A country's tax regime has a clear impact on where international companies choose to locate; and not just the main corporation tax rate. Simple inducements, such as enterprise zones and low taxes for top earners can swing the decision in favour of one country over another.

Destination Maternity, the US baby clothes business seeking to swallow Mothercare[3], wants to escape the US's 40% corporation tax rate. The UK is attractive because Mothercare is not only a struggling business and therefore cheap to buy, but also because Britain has worked hard to become one of the lowest tax jurisdictions in the G20.

George Osborne has argued that all the Treasury's tax incentives are concerned with creating jobs and "genuine business investment", but he has been unable to escape accusations that Britain is now increasingly attractive to foreign companies after becoming one of the world's largest and most sophisticated tax havens.

Am I the only one who finds the phrase “unable to escape accusations that Britain is now increasingly attractive” is totally stupid?