In his final budget speech before the elections, George Osborne the British Conservatory Party politician said that companies that move their profits overseas, and thus evade tax, will be subject to a “diverted profit tax”.
Commencing in April, “Google Tax” will discourage large companies who divert profits out of the UK to avoid tax.
This action is implemented due to rows over how much corporation tax some companies pay and after last month’s revelation that the bank HSBC colluded with clients of its private bank to evade tax over many years.
“Let the message go out: This country’s tolerance for those who will not pay their fair share of taxes has come to an end,” Mr Osborne said.
Chief Secretary to the Treasury, Danny Alexander will announce the new legislation today, Thursday the 19th March and will outline new criminal offences and penalties for aiding tax evasion.
On top of that he will also change the corporation tax rules to prevent contrived loss arrangements.
He added that he would also be closing tax loopies that enable businesses to take account of foreign branches when reclaiming VAT on their overheads.
Mr Osborne said the new tax measures he was introducing were expected to raise £3.1bn over the next five years.
He added he was also raising the bank levy to 0.21%, which he said would raise £900m.
