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Jeremy Hunt warned over UK’s minimum tax rate

Jeremy Hunt, Chancellor of the Exchequer, UK government (File photograph)

UK business groups have told the government to halt the introduction of the controversial 15 per cent effective minimum corporate tax rate, the Financial Times has reported.

They said Chancellor Jeremy Hunt’s plan to include it in the spring finance Bill and enact it from the end of 2023, risked burdening companies with “impossible” reporting deadlines.

The publication said the UK government had confirmed that the 15 per cent effective minimum tax rate was for all subsidiaries of large UK multinationals, as part of an agreement signed by 136 countries, co-ordinated by the OECD, “a club of mostly rich nations”.

The Financial Times further reported that executives have urged ministers to wait for further guidance.

It said: “The policy is designed to stamp out profit shifting and corporate tax havens, but its implementation has been delayed and no country has yet enshrined the policy in law.

“The government estimated that the tax will raise £2.3bn a year for the Treasury by 2027-28. However, the Office for Budget Responsibility, the UK fiscal watchdog, qualified the estimate as “highly uncertain” and “difficult to model”.

“Business groups have warned that the current timeline leaves companies with insufficient time to prepare for the policy change, while the finer details of the rules still need to be clarified by the OECD.

“Making the tax calculation is a ‘big challenge’ that would require large multinationals to collect data from all of their subsidiaries and make a new tax calculation, the groups said.”

The publication quotes the CBI, the UK’s leading business group: “For affected businesses, this could trigger accounting, audit and public reporting requirements that are impossible to meet because the OECD has not finished negotiating the deal.”

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Published November 29, 2022 at 7:45 am (Updated November 29, 2022 at 7:45 am)

Jeremy Hunt warned over UK’s minimum tax rate

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