ref="http://www.cityam.com/people/george-osborne">GEORGE Osborne vowed to clamp down on corporate tax avoidance yesterday, calling for “concerted international co-operation to strengthen international standards for corporate tax regimes”.
The chancellor’s statement, delivered in tandem with German finance minister Wolfgang Schäuble at a G20 meeting in Mexico yesterday, came as officials from HM Revenue & Customs (HMRC) were grilled by the Public Accounts Committee over the Treasury’s tax take. The committee is looking into the tax affairs of large international corporations.
Lin Homer, the HMRC’s chief executive, told the committee that as things stand she was currently unable to prevent multinationals from paying minimal rates of tax in the UK, an issue that has received increased scrutiny of late.
The likes of Starbucks, Apple and Google have come under fire for diverting UK profits offshore to countries with lower tax rates.
“All HMRC can do is to apply the laws,” Homer said. “In an international setting multinational businesses can choose to an extent where some parts of their business are based and where some of their profits are based.”
Homer was also accused by Labour MP Austin Mitchell of focusing on smaller firms less able to challenge HMRC, a charge she denied.
Osborne said he wanted to see a competitive UK tax regime, but that firms must be required to pay those taxes. “That is best achieved through international action in the G20 and other relevant international fora to ensure strong standards,” he said.