Thank you very much for contacting me about corporations paying tax. I read your email carefully and noted your views on this important issue.
I understand your concerns and completely agree that digital companies must contribute fairly to funding our vital public services, although as I’m sure you will appreciate, I cannot comment on an individual company’s tax liabilities.
The way in which businesses work is changing, which is why I am encouraged that the Government is reviewing the taxation of digital companies, to make sure all businesses pay their fair share. The UK Government is leading efforts to reform the internationally agreed rules around where profit is made and where it should be taxed.
Pending this global reform the Government is exploring potential interim measures, such as a tax on the revenue of certain digital businesses. This would be targeted at businesses which derive significant value from users, such as social media platforms and search engines. The Chancellor has been clear that if an international agreement over taxation cannot be reached, then the UK will go it alone with our own Digital Services Tax.
The UK has been leading the way through tough new rules to crack down on multinationals shifting their profits to lower tax jurisdictions. Around £8 billion has been returned by cracking down on large multinational enterprises that are avoiding paying the right amount of tax in the UK. The Diverted Profits Tax has been introduced at a rate of 25 per cent on multinationals that artificially divert profits out of the UK.
I appreciate there is more work to be done, but this Government has made great strides towards ensuring businesses pay their fair share, and I am confident that we will continue to lead international efforts to reform the rules on corporation tax.
Once again thank you again for bringing your views to my attention. I will share concerns with the appropriate ministerial colleagues.
With best wishes.
Member of Parliament for Woking
House of Commons, London, SW1A 0AA