Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the level of profit shifting into the UK as a result of the corporation tax super deduction in (a) 2021-22 and (b) 2022-23.

The UK has been at the forefront of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting (BEPS) Project, which seeks to address the gaps and mismatches in the global tax system used to shift profits artificially to low or no tax locations where there is little or no economic activity.

The Government has already taken decisive action to ensure the UK’s tax laws remain robust and that multinational companies operating in the UK pay the right amount of tax on the profits earned here, including Corporate Interest Restriction rules (which raise approximately £1 billion a year), hybrid mismatch rules (expected to raise £900 million between 2016/17 and 2020/21) and the requirement for large businesses to provide HMRC with a country-by-country breakdown of their profits, tax and assets.

The super-deduction benefits businesses that have real physical substance (plant and machinery) in the UK, not those who try to shift profits artificially. The Government keeps the tax system under review at all times and will take any necessary action to address any emerging risks.