Osborne bid to fight tax avoidance ‘may empty, not swell, state coffers’

British chancellor George Osborne’s promise to clamp down on a tax avoidance loophole widely used by multinational technology companies could actually result in a reduction in the amount of money the government takes in, the Chartered Institute of Taxation has warned.

Patrick Stevens, the group’s tax policy director, admitted the effect of the Chancellor’s attempt to tackle the so-called “double Irish” arrangement used by some firms is difficult to predict but claimed that large technology companies could pay more corporation tax but other sectors would pay less, making the overall effect negative.

Mr Osborne’s move was instantly nicknamed the “Google tax” because the arrangement — involving payments between different parts of a company to shift profits from higher-tax countries to those with lower taxes — is widely used by technology firms.