Autumn Statement 2014: George Osborne to hit multinationals with 'Google tax'

George Osborne today vowed to impose a 25% tax on profits that multi-national companies generate from economic activity in Britain that they “artificially shift” offshore.

He vowed that a crackdown on what he called “aggressive” corporate tax avoidance will bring in an extra £5 billion in revenues for the Treasury.

Technology companies such as Google and Facebook are among those likely to be hit.

“We will make the biggest multinationals pay their share,” said the Chancellor, as he outlined the plan to combat offshore avoidance. “It is not fair to others British firms. It is not fair to the British people.”

Google, Facebook and other maintain they have always paid all taxes according to UK law, but they have declared low profits in Britain by diverting most of their revenues to Ireland and other low-tax havens.

It was not immediately clear exactly how Osborne’s new tax on profits could hit multi-nationals.

Mr Osborne first signalled plans to clamp down on avoidance by tech firms — dubbed a Google tax — in his Conservative Party conference in September when he said: “If you abuse our tax system, you abuse the trust of the British people.”