by Keith Richmond

CHANCELLOR Alistair Darling is believed to be preparing to revise the rules on corporation tax in the face of threats by several high-profile companies to leave Britain if their “tax burden” is increased.

Treasury officials are drawing up alternative proposals to put to bosses from major corporations who have said they will move their company headquarters off shore unless they can do a deal with Mr Darling over the summer.

Moves by Shire Pharmaceuticals and United Business Media to relocate their head offices to Ireland have unnerved both the Prime Minister, Gordon Brown, and his Chancellor of the Exchequer, and forced them to rethink reforms which were designed to simplify taxes on the enormous profits these firms earn abroad.

Aberdeen Asset Management, the insurance and fund management group Old Mutual and the medical equipment company Smith & Nephew have all threatened to quit and Sir Martin Sorrell, chief executive of the world’s largest advertising agency, WPP, said he was thinking of moving to Dublin because of Mr Darling’s “arcane proposals”. WPP had revenues of £6.19 billion last year and a tax bill of just £204 million.

A committee of Treasury officials and senior business figures, including Richard Lambert, director general of the CBI, will discuss the reform package next month in an attempt to quell the row over what businessmen have taken to calling “a tax too far”.

The committee will, though, include representatives from the TUC which has been at pains to point out that most UK businesses pay far less in corporation tax than the statutory 28 per cent. The average is, in fact, just 22 per cent.

Recently it was revealed that British American Tobacco paid no corporation tax at all – despite declaring pre-tax profits of more than £3 billion last year.

A Treasury spokesman told Tribune: “The committee will look at the impact of taxes on UK businesses and how government policy can support them in the future.”