UK ‘bleeding’ £600m a year over exemption status handed to 1 country | UK | News
The UK is reportedly being bled dry by a country that has granted exemptions costing £600 million a year. HMRC figures show the tax cut expected as part of Parliament’s Public Accounts Committee findings will leave out the US. This exemption comes despite 150 countries agreeing to a 15% global minimum tax.
The global minimum tax was created to prevent large global companies from shifting profits to lower-tax regions. The United States will not be included in the agreement signed by the Organization for Economic Co-operation and Development. HMRC estimates that around £21bn of the £70.1bn of tax under review in 2025 as part of investigations into large businesses faces international exposures. RadioNews Center reported.
Nicole Newbury, HMRC’s director of large business compliance, told the committee that the US’s exemption from the Pillar 2 tax rule would impact UK tax revenue. He said: “This has reduced the benefit of additional tax payable in the UK by around £600 million a year. The estimate that Pillar 2 will bring to the UK is now down to £1.6 billion a year, so there will be a monetary impact.”
British Labor Party politician and former economist Clive Betts has since weighed in on the committee’s conclusions, warning that the UK was “pouring money” into the US over lax rules.
Betts, deputy chairman of the committee, said: “The UK still faces the risk of diverting a significant portion of tax revenue abroad through the cross-border diversion of profits from multinational corporations.
“HMRC must continue to work to understand how companies comply with the new rules on international minimum corporation tax rates, particularly in light of the parallel agreement with the US that exempts its own companies from these rules.”
The PAC committee warned that the UK tax authority needed to deal with larger global firms, and also noted that HMRC’s ongoing tax collection intervention was “generally working well”. Despite this, the committee says there are still “significantly high” risks of multinational companies diverting profits to avoid tax.
