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London

The City of London’s Lord Mayor has welcomed plans for a new approach to taxing multinational companies as “a huge plus for the UK” that could reverse 2008’s drift of companies to more attractive tax regimes. But Mr Luder, a tax expert who became head of the City of London in November, warned that Britain’s appeal could be blunted by new restrictions on interest relief that are part of the mooted reforms.

The government’s latest plans mark a shift away from Britain’s tradition of taxing corporate profits earned abroad, as well as at home, towards a “territorial” approach, in line with the European norm. Their publication was welcomed by businesses.

Alderman Luder, whose main role as Lord Mayor is to be an ambassador for financial services and professional businesses, said the latest proposals were “very fundamental reforms” that could create a perception of Britain as an attractive centre for headquarters.

“The driver has been the exodus of wellknown multinationals. If handled correctly, [the proposals] could not only reverse this but could turn the UK into a competitive headquarters location for companies,” he said in an interview with the Financial Times.

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