The UK is to introduce a new tax designed to crack down on firms like Google who channel cash through subsidiaries to avoid tax.

Now Google — which came under fire last year for funnelling billions to Bermuda — and other firms will be subject to a new “diverted profit tax” from next month — dubbed the Google Tax in Britain.

UK Chancellor of the Exchequer George Osborne, who announced the 25 per cent tax in this week’s budget, said: “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.”

The move came after it was revealed a series of global companies, including Google, used complicated manoeuvres to minimise corporation tax.

Mr Osborne also made a budget commitment to create new criminal offences and penalties for aiding tax evasion.

And he said that the corporation tax rules would be changed to block loopholes which allowed for “contrived loss arrangements”.

Mr Osborne told Westminster MPs that the changes would raise an estimated £3.1 billion ($4.5 billion) for the UK Treasury.

The Royal Gazette reported in 2013 that Google had revealed its Dutch arm funnelled nearly $12 billion to Bermuda to avoid paying tax on its profits.

The latest figures show that Google Netherlands Holdings, raked in $1.6 billion from its Irish sister company and $315 million from Singapore.

Most of the money was then channelled to Google Ireland Holdings, a Bermuda-based firm.

The scheme reduced Google’s effective corporate tax rate to five per cent — most of which is paid in Ireland, which has relatively low tax rates.

The figures were revealed in filings by one of Google’s Dutch subsidiaries and means that royalty payments paid to Bermuda — where the firm holds its non-US intellectual property — have doubled over the past three years.

Google’s tax arrangements — although legal — have been condemned in the UK and other European countries and prompted politicians to look at a crackdown on corporate profit shifting.

The firm, based in the US, used differences between the US and Irish tax codes, which means it is seen as an Irish company by US tax authorities, but as a Bermudian firm by the Irish taxman.

Google last year only paid 2.6 per cent tax in the US on sales worth $8.1 billion — because it channelled most of its overseas profits through Bermuda, which has no corporate income tax.

The UK arm of the firm, as well as other European operations, are designated as providers of marketing services to Google Ireland.

But Google declares little profit in Ireland because it sends nearly all the cash it gets to the Bermuda arm in the form of licence fees for intellectual property.

Westminster MP Margaret Hodge, the chairman of the Public Accounts Committee, said Google’s tactics were “evil” and said the firm was “devious, calculating and unethical”.

Google has insisted it follows the tax laws in all the countries it operates in and pays little tax in the UK because it profits are not generated by UK employees.

Under the tougher rules, companies with an annual turnover of £10 million ($14.7 million) will have to tell the UK taxman if they think their company structure could make them liable for diverted profit tax.

Once HM Revenue & Customs has assessed the structures and decided how much profit has been diverted from the UK, the firms will have 30 days to object to the 25 per cent tax bill.