Multinational Companies: Tax Avoidance

Treasury written question – answered on 11th June 2019.

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Photo of Theresa Villiers Theresa Villiers Conservative, Chipping Barnet

To ask the Chancellor of the Exchequer, what steps he is taking to tackle the use of aggressive artificial tax avoidance schemes by large international businesses.

Photo of Jesse Norman Jesse Norman Financial Secretary to the Treasury and Paymaster General

Large businesses are subject to a significant level of scrutiny by HM Revenue and Customs (HMRC). Approximately half of the UK’s largest businesses are under HMRC investigation at any one time. In 2017-18 HMRC investigations into large businesses secured over £9bn in additional tax revenue. HMRC uses measures such as the Diverted Profit Tax, corporate interest restriction, and other rules to help promote tax compliance.

Tackling multinational tax avoidance is a global issue, which is why the UK continues to lead global efforts through the OECD and G20 to address gaps and mismatches in the international tax system. The UK has also been at the forefront of implementing actions arising as a result of this international effort. This includes introducing rules which prevent multinationals from exploiting differences in how countries tax financial instruments, entities and branches, and introducing rules which prevent multinationals claiming excessive tax deductions for interest expense.

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