EXCHEQUER SECRETARY David Gauke has made strong indications the government is to act on loopholes allowing multinational companies to shift their profits out of the UK into lower-tax jurisdictions.
After hearing MPs from across the parties call for the closure of loopholes during a commons discussion, Gauke agreed the current international system does not adequately define when a business has a permanent establishment in any particular place, the Guardian reports.
Companies such as Google, Amazon and Starbucks have been lambasted both in public and before the Public Accounts Committee over their UK tax affairs after shifting their profits offshore in order to pay in lower-tax jurisdictions. There is nothing to suggest any legal wrongdoing.
Gauke told MPs: “We are leading the way in encouraging the OECD to look at what needs to be done to ensure that the tax rules are brought up to date for the internet world.”
He went on to refute claims HMRC is not doing enough to curb international tax avoidance, noting “they can only collect the tax due under the law” and adding the taxman had generated £8.8bn through anti-avoidance efforts.