The UK is reportedly being bled dry by one country it afforded an exemption to which is costing £600million per year. HMRC figures show the expected tax reduction as part of the Parliament’s Public Accounts Committee findings will leave out the United States. This exemption comes despite 150 countries agreeing to a 15% global minimum tax.
The global minimum tax was drafted in to stop large global companies shifting profits to jurisdictions with lower taxes. The US will not be included in the deal, which was finalised by the Organisation for Economic Cooperation and Development. Of the £70.1 billion of tax under consideration in 2025 as part of investigations into large businesses, HMRC estimates around £21 billion of this faces international risks, RadioNewshub reported.
Nicole Newbury, director of large business compliance at HMRC, told the committee the US exemption from the Pillar 2 tax rule will impact the UK’s tax income. She said: “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 £1.6 billion a year, so there will be a monetary impact.”
British Labour Party politician and former economist Clive Betts has since weighed in on the conclusions of the committee and warned the UK is “bleeding” money because of the lax rules for the US.
Betts, the deputy chairman of the committee, said: “The UK still risks bleeding a significant amount of its tax take overseas through the cross-border diversion of multinationals’ profits over borders.
“HMRC should be bearing down on work to understand how companies are complying with new rules on international minimum rates for corporation tax, particularly in light of the parallel agreement with the US exempting their own companies from these rules.”
The PAC committee has warned that the UK tax authority must tackle larger global firms while also noting that HMRC’s ongoing tax collection response is “generally working well”. Despite this, the committee notes there is still “significantly high” risks in mutlinationals diverting profits to avoid taxation.