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Yahoo quits London HQ for tax haven Switzerland
Jim Armitage, Evening Standard14.03.08
Internet search giant Yahoo is moving its European headquarters from London's Shaftsbury Avenue to Geneva after being driven away by British taxes.
Yahoo becomes the latest of a host of multi-national businesses being lured away from the UK by rival countries with lower corporation taxes.
The move came as a particular blow to Britain's efforts to keep technology companies here. Google, despite employing several hundred staff in London's Victoria, opted to base its European headquarters in Zurich.
Video games maker Electronic Arts moved its engineering HQ from London to Zurich. EA's arch rival SCI last month announced it was moving dozens of jobs from its Wimbledon HQ to Canada.
In this week's Budget, Chancellor Alistair Darling rejected calls from his Conservative shadow George Osbourne to extend his proposed corporation tax cut, which comes into effect next month.
Even at the new 28% rate, Britain is still well above other countries including Switzerland, where the national average rate is nearer 20%.
The Swiss have succeeded in luring a host of big companies in recent years. More are expected to follow in the wake of Darling's new rules on non-doms.
Swiss councils have been directly approaching wealthy London non-doms running hedge funds and other investment businesses to highlight the benefits of moving to the Alpine haven. Procter & Gamble and Colgate-Palmolive, the giant US companies, both elected to site their European HQs in Switzerland. Kraft recently upped sticks from offices near Kew.
The CBI has repeatedly warned about the drift of multinational businesses away from the capital. Modern communications technology and transport links mean these administratve bases can be located almost anywhere.
Switzerland is low in tax because its regions, known as cantons, compete against each other.
Holland, with its corporate tax rate of nearer 25%, has attracted Shell to locate its global HQ there, as well as Starbucks' European base.
Yahoo boss Jerry Yang's attempts to save costs have been sharpened by Microsoft's hostile takeover approach for the company.
Yang has been trying to stave off the bid and persuade shareholders the group can be rescued. However, as it emerged today that the two sides had met, expectations are Microsoft will win.
OTHER BIG NAMES THAT CHOSE TO QUIT
Kraft Foods: taste for Zurich
The foods giant upped sticks from west London, citing taxes, the Heathrow nightmare and general quality of life.
Gallaher: Geneva-bound
Japan Tobacco, which has just bought the business, has said it intends to move it from Surrey to Geneva, citing taxes.
Experian: moved to Dublin
When Experian split from GUS, expectations were that it would choose a London head office. Instead it opted for low-tax Ireland.
Catlin: chose Bermuda
The Lloyd's insurer opted to move its domicile from London to Bermuda, citing the 11% tax rate there and lack of red tape.
Hiscox: off to Bermuda too
Hiscox, Catlin's bigger rival, followed suit.
Shell: homed in on Holland
When the Anglo-Dutch oil giant merged its board into one, the Hague won in the headquarters stakes.
Reader views (4)
The problem with New Labour and all socialists is that they hate the idea that anyone should be financially independent. They want a nation of dependents those who will vote for them because of benefit handouts, paid for by those who cannot afford to leave the country.
If the tax system was spread more evenly and not lumped unfairly on anyone earning between £30K and £150K we'd all be better off and so would the economy. Tax should be cheaper to pay than the saving you make by paying an accountant to get your bill reduced.
- Marc, Harrow, UK
Don't forget that it's the Tories under Cameron that brought this stupid non-dom tax into the political agenda in the first place.
- Nick, United Kingdom
Well done Nu Labor, the trickle is turning to a flood. These stupid morons have killed the Golden Goose with this dumb non-Dom tax. New York must be pissing themselves laughing, the Swiss cannot believe their luck! Mega own goal.
- James, New Malden, Surrey
Fantastic work by New Labour and their successive budgets!
At this rate London can stop developing "new office space" immediately as their will be no need for it!
Obviously this is really just the start of the exodus... Many, many more companies will now follow suit. Sad, but true!
After all, it makes "sound business sense", which New Labour simply cannotdeny!!
- Fraser, Telford Park
