British American Tobacco: 50% tax will scare off foreign execs

British American Tobacco today warned that the UK's tax regime is making it difficult to attract foreign executive talent.

The company behind Dunhill, Lucky Strike and Pall Mall cigarettes announced a 17% leap in annual sales to £14.2 billion. Profits for 2009 rose 15% to £4.1 billion, enabling it to raise its dividend by 19% to 99.5p.

Chairman Richard Burrows reported that returns to shareholders in the past five years were 175%, compared with 35% for the FTSE 100.

But the impending 50% income tax for salaries of above £150,000 could hurt those results by keeping some of the best people away.

Director Michael Prideaux said: "As an international company we like to bring people in from big markets such as Brazil to work here for a spell. They have to pay a lot more tax if they are here and they don't like it."

BAT does not pay much tax in the UK. Most of its earnings are made overseas.

It claims to be "politically neutral", though until recently it employed shadow business secretary Ken Clarke as deputy chairman.

Unemployment is a problem, as it leads smokers to buy cheaper cigarettes or go to the illegal market.