Rishi Sunak urged to act ‘immediately’ to crack down on UK-based companies hiding their profits in offshore tax havens, in move Labor claims reportedly fetch up to £7billion a year .
Sir Keir Starmer’s party wants the Prime Minister to introduce a “multinational top-up tax” in line with reforms agreed by the G20 in 2021.
Under the plans, large companies headquartered in the UK would have to pay an effective rate of 15% on all profits they make in other jurisdictions around the world.
If they didn’t, Britain would be able to charge an extra tax in its country and derive revenue from it, with a few exceptions.
This would only apply to businesses with an aggregate turnover of more than €750m (£655m) a year.
The aim would be to reduce the incentive to shift profits to low- or no-tax jurisdictions, as companies would have to shell out the minimum rate regardless of where the money is stored.
Labor wants the government to show ‘urgent leadership’ in taking action to implement the top-up levy.
A bill to introduce the change was published in July 2022, but proposals have yet to be tabled in parliament.
Shadow Chancellor Rachel Reeves is also calling on ministers to make “fairer choices” on taxes and spending, and to explain how they will grow the economy and improve living standards.
“Britain has so much potential, but we are falling behind on the world stage, while the costs of mortgages, food and energy rise more and more,” she said.
“The country is being held back by a Conservative government that has brought the economy down, with workers paying the price.
“What Britain needs in next week’s Autumn Statement are fairer choices for workers and a proper growth plan.
“Labour has a plan to secure our economy and grow it again, powered by the talent and efforts of millions of workers and thousands of businesses.
“Workers need a fresh start with a government on their side.”
A Treasury spokeswoman said: ‘It was the Prime Minister, under Britain’s G7 Presidency, who laid the foundations for historic international tax reforms now supported by more than 130 countries.
“Since then, we have been at the forefront of global efforts to deliver these reforms, including consulting on the implementation of the UK Global Minimum Corporate Tax Rules and publishing a bill this summer.”