Tax Avoidance

Baroness Kramer Excerpts

Wednesday 29th April 2020 Lords Chamber

[The Lord Speaker (Lord Fowler)]

The noble Lord, Lord Leigh of Hurley, does not appear to be there. I call the noble Baroness, Lady Kramer.

[Baroness Kramer (LD)]

My Lords, quite a number of companies will make extraordinary profits as a consequence of Covid-19. At this point in time it is hard to identify which they are, but we can see that it is happening with some traders and private equity players, and it may well be happening in the digital industry, which is becoming more and more dominant and, as others have said, pays almost no tax in the UK despite the size of its presence. Following our exit from lockdown and the pandemic, will the Government look at a windfall tax so that those who have sacrificed during the pandemic understand that the burden is being spread over everyone’s shoulders?

[Lord Agnew of Oulton]

The noble Baroness makes a sound point. It is just too early to make those sorts of assessments. I want to pick up on the point about digital companies. We have introduced the digital services tax, which came into play on 1 April this year; it is a 2% tax on the revenues which search engines and social media platforms derive if they generate more than £2 billion over the next five years. We have made a start on this but, as the noble Baroness will probably know, these things need international collaboration. If there are excessive profits over the next few months, we will of course review things.