Recent corporate tax reforms have given the UK one of the most competitive tax regimes in the G20 making it a highly attractive place to locate business. In addition to the range of tax incentives that can be used to manage the overall effective tax rate that a business will be subject to, HMRC has now established a team to deliver a range of bespoke clearances to give certainty on how those incentives will apply.
So it's now possible for businesses to obtain certainty regarding their potential tax liability at the time they're considering whether to bring business to the UK, or expand their existing footprint.
In this short video Matt Ryan (leader of our UK as a business hub initiative) and Diane Hay (who has been leading discussions with HMRC) discuss the opportunities for business and the experience they've gained in dealing with HMRC.
- Matt Ryan - International Tax Partner
- Diane Hay - Special Advisor, International Tax
Hi, I'm Matt Ryan, international tax partner at PwC. We're here to talk about the fact that the UK government has set itself the objective of having the most competitive tax system in the G20 and that's bringing a number of opportunities for businesses. What we call that here at PwC is our UK is a business hub initiative.
I’m joined today by Diane Hay. Diane's been leading our discussions with HMRC. So for the uninitiated Diane, what is our UK is a business hub initiative?
Well, it's about helping businesses that want to move to the UK. We’re talking here mostly about traditional, entrepreneurial principle type structures, but also possibly businesses that want to move their headquarters to the UK or businesses that might want to bring senior executives to come and live and work in the UK. And it's not just about bringing business to the UK - it's about businesses that are already here expanding their UK footprint.
So what we’re seeing really is the UK has got a very attractive tax system now and a lot of companies are wanting to come here. But it's fair to say whilst the UK has got a very competitive tax system it's still very complicated, and one of the things that I'm seeing in practice is companies are wanting the certainty. And they want that certainty upfront before undertaking those significant business decisions. So what can we do around getting them the certainty that they desire?
Well you are absolutely right, Matt. I think the key to this whole initiative is certainty. So what we're able to do is through a number of conversations over a couple of years now with HMRC, we've been able to talk to them about the things that business needs in order to make these quite important moves and come up with HMRC, if you like a protocol, for how we can go to them with a client and talk to them about the different types of certainty they may need. And this could range from an advance pricing agreement to cover transfer pricing areas to getting CFC clearances to getting help with the implementation of the Patent Box and possibly even some sort of assurance around corporate residence.
Ok, so I think what we're talking about here is really a fair application of the rules to everybody, we are not talking about any special deals here are we?
Absolutely not, no. It's very clear, we must say this, there are no special deals her. But what we are able to get with this dialogue with HMRC is a coordinated series of rulings that can be done often very much within the timescale needed by the client in order to, I think, make the final decision as to whether or not they want to come to the UK.
And I’m spending a lot of my time at the moment overseas talking to businesses about what the UK has to offer and then sending them your way to have the discussions with HMRC. So what have we delivered for clients in this area?
We’ve taken a quite a number of clients now to see HMRC and we are well into the process. We've got a very large retailer whose going to be putting their whole of their European business into a UK principal. We've taken a number of insurance clients to see HMRC and they're interested in moving their headquarter companies to the UK. We've taken other businesses who want to put their senior management here because that will build the UK business here for them. So a wide range of clients and a lot of different types of opportunities and what we've been able to get for them is really a bespoke set of clearances that cover their need for certainty.
Thanks Diane. So groups have the opportunity to go and get certainty from HMRC. Clearly there are a number of opportunities for groups to use the UK going forward. If you have any questions about how this may apply to you please contact either Diane, myself or any of your normal PwC contacts.
Thank you very much.