Plumbing and heating giant Wolseley has been criticised for its decision to re-domicile to the tax friendly haven of Switzerland.
The 123-year-old company yesterday announced controversial plans to set up a new holding company in Jersey with tax residence in Switzerland. This will reduce Wolseley's corporation tax rate from 34% to 28%, and would have saved the firm £23m over the past year.
Ian Meakins, chief executive, said the relocation was due to Britain's controlled foreign companies tax regime, which applies UK tax on overseas earnings.
"We have had serious engagement with the authorities and HMRC,” he said. “They have been as helpful as they possibly could be because, fundamentally, we don't want to go. It's simply a question of creating value for shareholders.”
But the decision was slammed by plumbing entrepreneur Charlie Mullins, managing director of Pimlico Plumbers, who accused Wolseley of skimming the cream off the economy during the good times and turning its back once things get a little tougher.
He said: “The UK is in deep financial trouble and because Wolseley’s pitiful management can’t figure out how to make a quid they’re now blaming the Government.
“They were more than happy to skim the cream off the economy during the good times, and now things are a bit hard they’re off. Quite honestly they are no better than benefit scroungers, who refuse to work while taking as much as they can out of the system. In Wolseley’s case they want access to the huge UK market, but they don’t want to put anything back.”
For the year to 31 July, Wolseley cut its pre-tax loss to £328m (2009: £766m) on revenue of £13.2bn (2009: £14.4bn). Trading profit was flat at £450m.