Friday, July 29, 2011
In a tax-blow to the UK exchequer, the Virgin Group is planning to shift a portion of its operations to Switzerland to maximize tax efficiency.
Virgin Enterprises, which owns the trademarks and rights to the Virgin brand will be relocated to Geneva to achieve tax efficiencies not possible in London. According to the conglomerate, the decision is as a result of plans to generate new revenue from franchising arrangements, particularly in emerging markets.
Virgin has confirmed that other segments of its business, including its larger operations under subsidiaries Virgin Media and Virgin Atlantic, will continue to pay tax in Britain.
A spokesperson for Virgin said according to City AM that::
“We are considering moving our licencing entity Virgin Enterprises to Switzerland. Like many international groups we have a management presence there and this will accelerate our expansion.”
“None of these prospective changes impact the very substantial Virgin-branded businesses that are based and continue to operate in the UK such as Virgin Atlantic, Virgin Media, Virgin Money and Virgin Trains.”
Virgin becomes the latest in a growing list of firms which have moved aspects of their businesses out of the UK for tax purposes in recent years. However, there was one glimmer of light recently for the UK government after Bermuda-based insurers Lancashire revealed that it is moving its base to Britain in order to benefit from planned changes to the UK's Controlled Foreign Company rules.