Wednesday 9 June 2021 6:50 am

Sunak pushes for City of London exemption from G7 tax plan

Chancellor Rishi Sunak is pushing for an exemption for the City of London from the G7’s recently agreed global tax plan.

Sunak is looking for a deal for financial services, the Financial Times first reported, in wake of fears that global banks with head offices in London could be affected.

Major banks are headquartered in the City, but generate more than half of their income elsewhere, like HSBC, which generates more than half of its income from China but is the UK’s biggest bank but revenue.

Sunak raised the City of London-related issues at the G7 talks, sources told the FT, and allies confirmed he would make the case when the talks moved to the G20 next month.

A British Official told the Financial Times: “Our position is we want financial services companies to be exempt and EU countries are in the same position.”

Sunak has been in favour of the “historical agreement” by G7 finance ministers, which covers the world’s largest and most profitable multinational companies, because tech giants would “pay their fair share of tax in the UK.”

The deal will see a global minimum tax of at least 15 per cent levied on the world’s largest companies.

Such a deal aims to end what US treasury secretary Janet Yellen has called a “30-year race to the bottom on corporate tax rates” as countries compete to lure multinationals.