Drugs firm to quit UK tax regime

Shire says its headquarters will remain in Basingstoke

Shire, one of Britain's biggest drug makers, has announced plans to move its tax base offshore.

The firm said it has applied to create a new holding company, which will be incorporated in Jersey and resident in Ireland for tax purposes.

Tax experts say this is the first time a company listed on London's FTSE 100 stock index has left the UK purely for tax reasons.

The move is set to spark a debate over Britain's corporate tax regime.

Shire's move means the company will pay a tax rate of 12.5% in future, rather than the 28% in the UK.

Adam Bainbridge, head of corporate tax at KPMG, said Shire's decision could open the gates for a mass exodus and "should have the policy makers in Whitehall sitting up and taking notice".

"The furore over the non-doms and capital gains tax proposals was one thing but losing our biggest companies is potentially far more serious," he said.

Shire defended the move as a result of its transformation from a primarily UK to an international business.

It said: "Shire has concluded that its business and its shareholders would be better served by having an international holding company with a group structure that is designed to help protect the group's taxation position, and better facilitate the group's financial management."

It added that nothing in its day-to-day business would change and it would retain its listing on the London Stock Exchange.