The Government fully shares the aims of increasing transparency and clamping down on avoidance and evasion wherever it occurs. I am proud that the Government has led the way in calling for public country-by-country reports. However, I do not believe this amendment would help to achieve the objectives.
According to Government legal advice, the amendment would, in practice, place a requirement only on UK-headquartered multinationals. Foreign-headquartered multinationals such as Google would not be caught at all, and that undermines the transparency objective of the amendment. The amendment also risks putting UK multinationals at a competitive disadvantage by imposing a reporting requirement that does not apply to foreign competitors.
Since 2010 the Government has been reforming the tax system to make sure taxes are paid – leading to companies changing their practices. The Government has raised record amounts by tackling aggressive avoidance and evasion – with an extra £100 billion collected in the last Parliament. Yield from compliance activity – dealing with aggressive tax avoidance, evasion and fraud – rose to a record £26.6 billion in 2014/15. This included £7.3 billion from the 2,000 largest and most complex businesses in the UK.
By Patrick McLoughlin on June 24, 2016