The British Government will explore an internationally coordinated new tax made specifically to capture the earnings of Internet giants, including Amazon and Google.
The British Government will explore an internationally coordinated new tax made specifically to capture the earnings of Internet giants, including Amazon and Google.
The Treasury wants to work with other jurisdictions, including the US and continental Europe, to close the loophole that allows web-based companies to avoid millions of pounds of tax on earnings around the world.
According to the Telegraph, the Chancellor is expected to appoint a tax expert to lead a consultation into the practicalities of a new levy following public and political criticism of the low levels of tax paid by some of the biggest companies operating in Britain.
More pressure for reform will come from the Public Accounts Committee which is publishing its report into Britain's treatment of international earnings, the report said.
The Parliamentary Committee has accused Google, Amazon and Starbucks of being ‘immoral’ in paying low levels of corporation tax, the report added.
According to the report, in evidence to the Committee, it emerged that Amazon recorded 2.9 billion pounds sales last year, but declared Amazon.co.uk sales of just 207 million pounds.
Over three years, the UK division has paid 2.3 million pounds corporation tax on 7.1 billion pounds sales, the report said.
According to the report, Google paid six million pounds corporation tax on 2.5 billion pounds of UK revenues in 2011.
Last week Matt Brittin, chief executive of Google UK, said that MPs were blaming companies for a system that they had designed.
"Google plays by the rules set by politicians," he said, adding: "The only people who really have choices are politicians who set the tax rates.
According to the report, the Treasury is planning to unveil a new ‘information sharing’ agreement with Britain's Crown Dependencies under which the governments of Jersey, Guernsey and the Isle of Man will pass on details of accounts and investment trusts held in their jurisdictions.
Experts have said that the clampdown on British territories is ‘low-hanging fruit’ but taxing web-based companies is far harder, the report added.
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