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Daily Tax Report: International

U.K. Labour Party Proposes Major Changes to Corporate Taxation

Nov. 15, 2019, 1:22 PM

The U.K.'s Labour Party wants to assess multinational corporations as single entities for tax purposes.

The Nov. 15 announcement is linked to leader Jeremy Corbyn’s newest election pledge to provide free, fiber-optic broad band across the U.K. by 2030.

  • The proposal would revolutionize how U.K.-based corporations are taxed and would likely necessitate arduous changes to tax treaties. However, Labour’s Shadow Chancellor John McDonnell said, “every part of this plan has been legally vetted, checked with experts, and costed. What we are offering in this election is real change,”
  • The new system would tax U.K.-based multinationals “on the share of their global profits that reflects their U.K. share of their global sales, employment and assets,” said Labour in a press statement.
  • On Oct. 27, McDonnell supported a report published by trade union Public Services International, Taxing Multinationals: A New Approach. It suggested a unitary tax system could bring £6 billion-£14 billion ($7.7 billion-$18 billion) of corporate tax each year.
  • Labour trails the governing Conservatives in the polls ahead of the U.K.'s Dec. 12 election.

To contact the reporter on this story: Hamza Ali in London at hali@bloombergtax.com

To contact the editors responsible for this story: Meg Shreve at mshreve@bloombergtax.com; Joe Stanley-Smith at jstanleysmith@bloombergtax.com

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