ICALS group Ineos has confirmed it will shift its tax residency from the UK to Switzerland in a move it believes will save the company £400m over the next four years.
Ineos, the largest privately owned company in Britain by turnover, said it had received the thumbs-up for the relocation from its lenders, including state-owned Lloyds Banking Group and Royal Bank of Scotland.
The company is struggling to pay down a £6bn debt pile and saw plans for a £880m refinancing torpedoed by its creditors last week.
Chairman Jim Ratcliffe and around 20 senior executives will move to run a new holding company in Switzerland. Ratcliffe, who founded the Lyndhurst-based firm in 1998, follows in the footsteps of entrepreneurs such as Terra Firma boss Guy Hands, who set up home in Guernsey last April in protest at the new 50 per cent top band of income tax.
An Ineos spokesperson said: “The benefit to the company is compelling. The consent of our lenders was received a couple of weeks ago and the decision to move the tax residency of the company has now been taken.”
When it announced the review of its tax residency in March, Ineos said it expected to save up to €450m (£396.5m) between now and 2014 by leaving the UK for Switzerland. The cash will be used for staff training, building fresh plants and investing in new technology.
Ineos joins the ranks of pharmaceuticals manufacturer Shire and advertising player WPP, both of whom moved to Ireland. Its exit will swell concerns that a punitive tax regime is damaging Britain’s competitiveness as a destination for business.
Ineos said many of its peers in the chemicals industry were based in Switzerland and that it needed to consider how best to “compete effectively” with them. The company derives around 70 per cent of its £30bn revenue from outside the UK.
Just over a quarter of Ineos’ 15,500-strong global workforce is based in the UK. The company said it remained committed to its operations in this country, including the 3,700 staff and 1,000 contractors it employs.