Sunday 22 April 2018 / 7:59 AM Anneliese Dodds / Business / Economy

Labour calls on Philip Hammond to get a grip of tax dodging multinationals

Labour has called on Philip Hammond to get a grip of tax dodging multinationals, after it was revealed he will fail to collect around £745 million over five years from this measure originally designed to clamp down on tax avoidance.

The Diverted Profits Tax, also known as the “Google Tax”, will raise millions of pounds less than was initially claimed in Budget 2015.

Hidden in the Spring statement was an updated forecast which revealed the failure of the government to clamp down on those big multinationals who hide their taxes off shore.

For example, over the last two years alone £377 million will go uncollected while the Chancellor in the Budget only set aside an additional £177 million for our schools.

Diverted Profit Tax receipts over 5 years:

Years 2016-17 2017-18 2018-19 2019-20 2020-21 Total Change
July 2015 300 400 300 400 400 1,800 -745
Spring Statement 2017 138 185 268 301 162 1,055
Difference -162 -215 -32 -99 -238

(Source: OBR EFO July 2015 and OBR EFO Mar 2018, numbers in £ millions)

 

Anneliese Dodds MP, Labour’s Shadow Treasury Minister, commenting on the revelations, said:

“The Chancellor needs to get a grip of tax avoidance. It’s not fair that some large multinationals are not paying their fair share yet benefitting from the billions in corporation tax giveaways Philip Hammond is continuing to handout.

“The Tories’ so called ‘Google Tax’ has done little to encourage tech giants and big multinationals like Google to truly pay their fair share.

“Last year, The Chancellor said he was announcing a new list of tax avoidance measures, but how can we trust him to use those effectively when he can’t collect the money from the current ones?

“At a time when the Tories claim we don’t have enough money for our vital public services like our NHS, police, schools and children’s services, there is no excuse for failing to clamp dodging on tax dodging firms.

“The next Labour government will seriously clamp down on tax avoidance and evasion, and implement our Tax Transparency and Enforcement Programme to build an economy for the many, not the few.”