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CBI warns over Osborne's 'Google tax' proposals

John Cridland, boss of the Confederation of British Industry, has warned over Chancellor George Osborne’s plan for the UK to “go it alone” on corporate tax reform.

International economic body The Organisation for Economic Cooperation and Development, which consists of 34 countries, is already putting together a plan for tacking the most aggressive tax schemes.

CBI boss John Cridland said action by the UK outside that process would “be a concern for global businesses”.

Osborne claims his crackdown will raise £1 billion from multinationals. A Financial Times study of 7 US technology giants found they paid just £54 million in UK corporate tax in 2012, though their overall sales to British customers totalled $15 billion.

Tax campaigners say tax reform to prevent international companies from paying low tax is hard, but possible.

John Cridland, CBI director-general, said: “International tax rules are in urgent need of updating, but the decision for the UK to go it alone, outside the OECD process, will be a concern for global businesses, and moving the goalposts on offsetting losses risks creating a worrying precedent.”

Osborne’s proposal has been called the “Google tax”, but Google is certainly not the only large company accused of using the magic of international accounting to shift profits around the globe.

The allegation is that the bulk of those profits often end up in low-tax regimes, even if an unsophisticated observer can’t see how they were earned there.

Big names Apple, Amazon, Starbucks and several others could be affected by the UK’s new tax rules.

This was posted in Bdaily's Members' News section by Clare Burnett .