The Institute of Directors (IoD) has criticised the Diverted Profits Tax, known as the Google Tax, being introduced by the government.
The law aims to gain revenue from some profits that multi-national companies register abroad. Firms will be legally obliged to notify HMRC, and pay a 25 per cent tax on identified earnings.
Stephen Herring, the IoD’s head of taxation, blasted the law, saying it “represents a dramatic breach with the government’s own road map on tax, and we can only conclude that short-term political pressure has given the government the confidence to ride roughshod over its own rules.”
A Treasury spokesperson told City A.M.: “We’re absolutely clear that multinational companies that do business in the UK should pay their fair share of tax, which is why we’re introducing a 25 per cent tax on profits generated by multinationals here which they then shift out of the country. It's estimated that this will generate over £1.3bn in additional revenues.”
The Treasury rejected criticism that there was not enough consultation on the new law.