Chancellor George Osborne is set to close a number of loopholes used by Google, Amazon and other multinationals to shift profits overseas and lower their UK tax liabilities.
The Sunday Times reports that the chancellor will launch the so called ‘Google tax’ in the upcoming budget.
In imposing the tax Osborne is responding to significant public anger over how little tax is paid in the UK by the new breed of mainly tech-based multinationals, of which Google has become the poster child.
Other firms accused of diverting funds away from the UK include Apple, Amazon and Starbucks. All these firms have been widely criticised for their alleged tax avoidance.
Such a tax has long been expected but The Sunday Times has now gained some of the potential details from government sources.
These sources claim that the new tax will involve a 25% levy on firms deemed to be avoiding tax, which is significantly higher than the current corporation tax which is set at 20%.
The budget, which will be Osborne’s last before the general election on May 7, will be presented to parliament on March 18.