UK will take unilateral measures against tech firm tax evasion
Currently, the government is working with the EU and the Organisation for Economic Cooperation and Development which advises on international taxation to establish a global system that would reduce tax evasion.
The financial secretary to the Treasury, Mel Stride, said the UK is ready to introduce a digital revenue level in the case that global solutions on tax avoidance fail.
Stride was speaking in the wake of figures from the "Google tax" introduced in 2015 showing that the system put in place to crack down on multinational companies' tax avoidance had brought in £388m last year, up from £31m three years ago.
"We have a strong preference for moving multilaterally in that space but we have said that in the event that that doesn't move fast enough for us then that this is something we could consider doing unilaterally, or perhaps with a smaller group of other tax authorities," he told The Guardian.
He also stressed that action might be taken in spite of the US' increasingly protectionist policies against foreign countries targeting their Silicon Valley firms.
The new tax could open up the companies' UK sales to HMRC whereas they currently only paid tax on profits. In Google's case, it paid around £50m in corporation tax on its UK profits this year of just over £200m, but its annual sales in the country stand at around £5.7bn. ■