UBM's Irish move branded 'tax avoidance'

United Business Media found itself at the centre of a political storm last night after confirming it would move its tax base to Ireland to escape the way in which international companies are taxed in the UK.

The company is the second large business this month to move its tax base across the Irish channel, following Shire Pharmaceuticals, which has also expressed dissatisfaction with the Government's treatment of UK-domiciled multinationals.

The moves by UBM and Shire have angered the Treasury, which is due to publish plans to reform the taxation of British companies' foreign subsidiaries before the summer. But UBM's decision to move its tax base to Ireland is especially difficult for senior ministers, given the very close links between the Government and Adair Turner, the company's longest-standing non-executive director.

While Lord Turner of Ecchinswell, ennobled by Tony Blair in 2005, sits as a cross-bench peer in the House of Lords, he is closely associated with Labour, having chaired a three-year inquiry into pensions reform, the findings of which have now been adopted by the Government. This year, the Prime Minister asked him to chair the Government's Committee on Climate Change, which will provide advice on cutting the UK's carbon emissions.

Lord Turner is due to step down as a non-executive next month, but last night said he had supported UBM's move. "It is a very reasonable decision to have made in the particular circumstances of this company," he said.

UBM, which earns around 85 per cent of revenues outside the UK, said its decision had been taken to simplify its tax affairs. It said: "The UK tax system imposes tax on all companies in a worldwide group ... This has given rise to both significant compliance costs and risks of inadvertent tax charges arising."

Business groups backed UBM. Richard Lambert, the director-general of the CBI, said: "Firms are seriously concerned about the high level and rising complexity of taxation in the UK, and are increasingly prepared to vote with their feet – the Treasury cannot ignore this issue or argue that companies are crying wolf."

However, Vince Cable, the Liberal Democrats' Treasury affairs' spokesman, criticised the example set by UBM and Lord Turner. "This is blatant tax avoidance and it is a terrible example to set," Mr Cable said. "Lord Turner is a very highly respected figure, and I sincerely hope he is not lending his name and reputation to a tax-avoidance scheme."