LONDON (Reuters) - British finance minister George Osborne said on Monday he was examining changes to clamp down on tax avoidance by multinationals which the government says are depriving Britain’s public coffers of hundreds of millions of pounds each year.
“Some technology companies go to extraordinary lengths to pay little or no tax here,” Osborne told an annual conference of his Conservative Party.
“If you abuse our tax system, you abuse the trust of the British people. And my message to those companies is clear: we will put a stop to it.”
Osborne did not mention any companies by name in his speech, which focused on the importance of bringing down Britain’s budget deficit and promoting his stewardship of the economy as May’s national election approaches.
Corporate tax avoidance has become a hot political topic following critical media coverage and parliamentary investigations into the arrangements many big firms use to reduce tax bills.
Osborne was among Group of 20 finance ministers who pushed the Organization for Economic Co-operation and Development to re-examine international rules that allow technology companies to shift profits into tax havens.
Proposals unveiled by the OECD earlier this month could eliminate structures that have allowed companies such as Google Inc and Amazon.com Inc to shave billions of dollars off their global tax bills.
Britain’s finance ministry said the planned new measures to stop the diversion of profits offshore would raise “hundreds of millions of pounds as part of an anti-avoidance package raising billions of pounds over the next parliament.”
The new measures would “dramatically reduce” the benefits for companies of using complex arrangements, such as the so-called “double Irish” accounting arrangement deployed by multinationals, especially technology firms, in order to reduce declared profits, the ministry said in a news release.
Tax campaigners have said that some new legislation introduced by Osborne on international groups with a tax base in the United Kingdom has made it easier for companies to avoid tax and encouraged a raft of multinational companies to shift their tax residence to Britain.
Additional reporting by Tom Bergin in London; Editing by Crispian Balmer and Sonya Hepinstall
Our Standards: The Thomson Reuters Trust Principles.