Labour accuse Hammond of sneaking out £700m drop in Google Tax receipts in Budget
2 min read
Labour has blasted Philip Hammond after the Chancellor quietly revealed the so-called Google Tax will miss out on some £700m from multinational firms.
Updated forecasts in the Budget last week showed a drop in expected receipts from the Diverted Profit Tax - aimed at catching global businesses that take their profits out of the UK to cut their bills.
Back in July 2015 the Treasury expected the measure - introduced by George Osborne - to rake in some £1.8bn between 2016/17 and 2020/21.
But as Mr Hammond announced a range of new measures on Wednesday to crack down on tax dodging, that projection was dropped to £1.1bn - a cut of £700m.
The independent Office for Budget Responsibility said the forecast was affected by a separate change to income tax collection.
Angry Shadow Treasury Minister Jonathan Reynolds ordered the Chancellor to “get a grip of tax avoidance”.
“It’s not fair that large multinationals are not paying their fair share yet benefitting from the billions in corporation tax giveaways Philip Hammond is continuing,” he fumed.
"The Chancellor said he was announcing a new list of tax avoidance measures, how can we trust him he can’t collect the money from the current ones?”
He added: “At a time when the Tories claim we don’t have enough money for our vital public services like our NHS, police and schools, there is no excuse for failing to clamp dodging on tax dodging firms.”
Announcing his Budget, the Chancellor vowed to bring forward a plan to collect more tax on things like brand names and trademarks - the profits of which are often squirrelled away offshore.
Mr Hammond declared: “It is this government that has clamped down on avoidance and evasion; this government that has seen the tax gap cut by a quarter to a record low.
“And this government that has raked in an extra £160bn over seven years for our public services by collecting the taxes that are due.”
He added: “So I will take no lectures, but I will take action.”
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