Tax exemptions for US companies are costing the Treasury, according to new HMRC figures
Britain stands to lose approximately £600million annually in tax revenue after the United States secured an exemption from the global minimum corporate tax agreement, HM Revenue and Customs (HMRC) has confirmed.
The tax authority disclosed this figure during questioning by Parliament's Public Accounts Committee (PAC), which has been examining how major multinational corporations are taxed within the UK.
The shortfall stems from a landmark deal finalised by the Organisation for Economic Cooperation and Development (OECD) in January, which brought together nearly 150 nations to establish a 15 per cent floor on corporate taxation worldwide.
American companies, however, will not be bound by these rules following the exemption agreement.
The parliamentary committee found that while HMRC's methods for collecting tax from major corporations are "generally working well", substantial dangers remain around multinationals shifting profits across borders.
These risks were described as "significantly high" by the PAC. Currently, HMRC is investigating £70.1billion in tax matters involving large businesses, with approximately £21billion of this total carrying international exposure.
The committee has urged the tax authority to offer greater clarity on these vulnerabilities and develop more robust strategies for addressing them.
Cross-border profit diversion remains a persistent concern, with global firms potentially moving taxable income to lower-tax jurisdictions.
Nicole Newbury, director of large business compliance at HMRC, told the committee: "It has reduced the benefit the additional tax that will be paid in the UK by about £600 million a year.
"The forecast for what Pillar 2 will bring into the UK has now reduced to £1.6billion a year, so there will be a monetary impact."
Clive Betts MP, deputy chairman of the committee, warned: "The UK still risks bleeding a significant amount of its tax take overseas through the cross-border diversion of multinationals' profits over borders."
He added that HMRC should focus on understanding corporate compliance with the new international minimum tax rates, particularly given the US exemption.
HMRC defended its record on tackling multinational tax avoidance: "The UK continues to lead the way internationally in making sure that multinational businesses pay the tax that's legally due.
"Our approach is delivering real results, bringing in additional £14.9billion in tax last year by effectively applying the tax rules to large businesses."
The global minimum tax agreement reached in January represented a significant milestone in international efforts to prevent profit shifting by major corporations.
The deal aimed to close loopholes that allowed companies to relocate earnings to territories with more favourable tax regimes.
