The Chancellor is Threatening Tech Companies With New Tax Rules

By Tom Pritchard on at

If there's one thing everyone can agree on, it's that big companies are excellent at paying as little tax as possible. Whether that means allegedly currying special tax deals from governments, fudging the books so they only pay significant tax in countries with deliberately low rates of corporation tax, and so on. Phillip Hammond, Chancellor of the Exchequer, brought this topic up again in his Spring statement, promising to do more to ensure big tech companies pay an appropriate amount of tax.

You might remember that this topic was first mentioned back in the Autumn budget, though we haven't heard a whole lot about it since. Hammond is adamant that the government is super serious about it, and will make sure big tech companies don't try and fudge the numbers to get away with paying as little as possible in the countries where they actually earn their money.

Now he's saying that the UK will be working with its international partners, including the EU, to find a solution to the problem. He also suggested interim measures until a solution is actually found, which may involve taxing a company's revenue rather than its profits. At the same time he also said that things would have to be done to prevent damaging start-ups and other companies that are still growing.

"The current misalignment between where digital businesses are taxed and where they create value threatens to undermine the fairness, sustainability and public acceptability of the corporate tax system."

He hopes that the upcoming G20 developing nations summit in Argentina can act as a first step towards dealing with the issue on an international level. [BBC News]

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