Thursday 20 May 2021 / 10:27 AM James Murray

Labour ramps up challenge to the Government on global minimum corporation tax

Labour ramps up challenge to the Government on global minimum corporation tax

Labour is ramping up its call on the UK Government to back the global minimum rate of corporation tax being proposed by President Biden at the upcoming G7 summit.

The party has tabled a new clause, published this morning (Thursday) by the House of Commons, calling on the Government to review the impact of the proposal in the upcoming Finance Bill, which will debated on Monday 24 May.

Labour say if the Government don’t back the proposal, they will be undermining a global deal to tackle major tax avoidance – as well as allowing British businesses to continue to be undercut by a small group of huge multinational corporations and online giants.

Britain is now the only G7 country to not back the plan, with Germany, France, Canada, Italy and Japan already supporting Biden’s proposal.

 

James Murray MP, Labour’s Shadow Financial Secretary to the Treasury, said:

 

“The Government have promised to get tough on tax avoidance, but they have failed every time.

 

“This global pact will bring in billions of pounds in extra tax benefitting Britain, while stopping huge multinationals and online giants from undercutting our businesses.

 

“By making sure they pay their fair share in Britain, we can level the playing field for our brilliant businesses, and build an economy fit for the future, with thriving industries, and good, secure jobs for all.”

 

The clause reads:

 

Review of impact of a global minimum rate of corporation tax

 

(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, publish a review of the impact on corporation tax revenues for the financial years 2022 and 2023 of a global minimum rate of corporation tax set at (i) 21 per cent in both years and (ii) 21 per cent in 2022 and 25 per cent in 2023.

(2) Any review under this section must include an assessment of the impact of a global minimum rate of corporation tax on:

  1. a)      levels of tax avoidance and evasion, and
  2. b)      the size of the tax gap in financial years 2022 and 2023.