Economic affairs select committee wants more funding for HM Revenue & Customs to tackle well-funded corporations
Amazon routes its £4.2bn annual UK sales through Luxembourg, paying negligible UK tax along the way. Photograph: Sarah Lee for the Guardian
The House of Lords has warned that "once-in-a-century" reforms to the global tax system proposed by the Organisation for Economic Co-operation and Development's (OECD) may not be enough to stop multinational companies avoiding billions of pounds in tax payments.
The Lords' economic affairs select committee also recommended increasing funding for HM Revenue & Customs in order to tackle well-funded corporations and allowing politicians to take private testimonies from HMRC officials on tax agreements with companies.
The committee said it was "not clear" whether the OECD reforms unveiled this month ahead of a G20 summit go far enough to stop big companies, such as Amazon, shuffling sales income from British customers to low-tax countries.
"It is not yet clear how effective the proposed solutions will be or whether they can be achieved within the [two-year] timescale," the committee's report, published on Wednesday, said. "In the meantime, the UK faces the prospect of losing much-needed revenue."
The committee urged the Treasury to "urgently review" the UK's corporate tax regime. It also called for a study of the impact of the changes put forward by the OECD, that had been asked to draw up the proposals for a meeting of G20 finance ministers in Moscow.
George Osborne had hailed the OECD tax reforms – potentially the most ambitious internationally-agreed tax changes since the 1920s – as an "important step towards a global tax system that is fair and fit for purpose for the modern economy".
The OECD reforms promise to put a stop to Amazon routing its £4.2bn annual UK sales through Luxembourg, paying negligible UK tax along the way.
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The Lords' economic affairs select committee also recommended increasing funding for HM Revenue & Customs in order to tackle well-funded corporations and allowing politicians to take private testimonies from HMRC officials on tax agreements with companies.
The committee said it was "not clear" whether the OECD reforms unveiled this month ahead of a G20 summit go far enough to stop big companies, such as Amazon, shuffling sales income from British customers to low-tax countries.
"It is not yet clear how effective the proposed solutions will be or whether they can be achieved within the [two-year] timescale," the committee's report, published on Wednesday, said. "In the meantime, the UK faces the prospect of losing much-needed revenue."
The committee urged the Treasury to "urgently review" the UK's corporate tax regime. It also called for a study of the impact of the changes put forward by the OECD, that had been asked to draw up the proposals for a meeting of G20 finance ministers in Moscow.
George Osborne had hailed the OECD tax reforms – potentially the most ambitious internationally-agreed tax changes since the 1920s – as an "important step towards a global tax system that is fair and fit for purpose for the modern economy".
The OECD reforms promise to put a stop to Amazon routing its £4.2bn annual UK sales through Luxembourg, paying negligible UK tax along the way.
More
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