Reeves reaction: UK leaving £11BN in unpaid corporate tax on the table

UK Chancellor Rachel Reeves has given a speech this morning about the budget challenges facing the UK, just as the Tax Justice Network published a report showing that the UK could have recovered £11 billion in corporate tax from tax havens by exercising a simple transparency measure the UK government has had since 2016 but has yet to use.

Australia and EU countries began to use the measure this year, and today’s research shows the measure can reduce multinational corporations’ tax cheating by over a quarter.

Reacting to UK Chancellor Reeves’ speech this morning about the upcoming budget statement, Tax Justice Network CEO Alex Cobham said:

“The UK lost £11 billion in tax to a US-backed global gag order that kept it from disclosing the name of multinational corporations found to be cheating on tax, our research shows today. The UK isn’t the only country to have lost tax under the gag order but it is the only country to have had the legal power to lift the order for nearly a decade but has yet to use it.

“Chancellor Reeves can raise billions in tax a year from tax cheating multinationals without having to raise or introduce new taxes, but by simply requiring them to publicly disclose their profit records. She can do this by using the power she already has under the Finance Act 2016 and it would require multinationals to meet the minimum level of transparency that local businesses are already required to adhere to. Research shows meeting this transparency level can reduce their corporate tax cheating by over a quarter. Australia and the EU have already started to locally lift the global gag order this year, overtaking the decade-long lead the UK wasted.

“The Chancellor is right to look for broad shoulders to tax but she’s doing it from the vantage point of the boardroom window, leaving billions in unpaid, ready-to-collect corporate tax on the table behind her. The Chancellor must combine tax transparency on multinational corporations with a wealth tax on the superrich to protect the earner way of life the rest of us rely on.”

The new research published by the Tax Justice Network today reports that a US-backed global gag order¹ preventing governments from revealing the names of multinational corporations found shifting billions into tax havens has caused countries to miss out on over US$475 billion in corporate tax from 2016 to 2021, the Tax Justice Network’s research reveals today.²

The tax lost is far more than the amount urgently needed for the $300 billion climate finance fund³ that countries committed to in 2024. “Governments claim there isn’t enough money for climate action but as this report clearly shows, there is – it is in the wrong hands”, said Greenpeace International’s Nina Stros.

A key driver of the losses is a dramatic escalation in tax abuse by US multinational corporations set loose by Trump’s 2017 Tax Cuts and Jobs Act, the research finds. US multinational corporations are now shifting twice as much profit out of the countries where they operate in and into the US, but are paying even less tax in the US than they were before Trump’s tax cuts were introduced.⁴

Read more about this research here.

-ENDS-

Notes to Editor

1. Governments started receiving detailed reports from multinational corporations – known as country by country reporting – in 2016 on where they are booking profits, exposing those booking their profits in tax havens and revealing how much they are cheating on tax by. The reports, required by an international standard introduced by the OECD in 2015 and first championed by the Tax Justice Network in 2003, were meant to be published publicly to serve as a deterrent but corporate lobbying successfully required the data to be anonymised after it is collected by governments and before it is made public. The standard barred any government from making the data public in any non-anonymised form. This in effect contorted the standard from a transparency measure into a global gag order. The anonymised version of the reports make it possible for the public to see how much corporate tax is being underpaid, but impossible to identify the multinational corporations doing the cheating, hence removing the deterrence effect of the transparency measure. The US is understood to have long opposed public by country reporting, dating back to the original G8 agreement in 2013 to mandate the OECD to produce a standard. More recently, Republican members of the US House of Representatives continue to push an appropriations bill that withholds funding from the Financial Accounting Standards Board (FASB) if it doesn’t drop its tax transparency requirement (which is much narrower than public country by country reporting but does require tax information at a country level). Presumably this Republican opposition (dating back to FASB’s decision in December 2023) has at least in part emboldened US multinational corporations to openly lobby against Australia’s partial lifting of the global gag order locally, and perhaps also the quite widespread refusal of some US multinational corporations to comply with the opening phase of EU’s partial lifting of the global gag order. Because the reports collected by governments track the global movements of multinational corporation’s profits, the reports collected in one country, especially if that country serves as a popular destination for multinational corporations’ headquarter offices, often expose profit shifting and corporate tax abuse suffered by many other countries too. For this reason, campaigners have called and continue to call on Australia and EU to expand their narrow lifting of the global gag order. See note 11 for more information.
2. The 2025 edition of the Tax Justice Network’s State of Tax Justice will be published on Tuesday 4 November 2025 here. An embargoed copy of the report is available here (password: tax#2025). The report finds that simply making the names of tax cheating multinational corporations public – by making public their country by country reports (see note 1) – would prevent over a quarter (28%) of corporate tax losses suffered to multinational corporations using tax havens, the Tax Justice Network’s latest modelling shows, based on behavioural changes seen among EU banks who were required to publicly disclose such reports in the past. Had governments not withheld from the public the reports they’ve collected from 2016 to 2021, US$474.6 billion of the US$1.7 trillion lost in corporate tax to tax havens over that period would have been collected. This revenue gain would have been the result of the deterrent effect alone with no additional effort or resourcing required from governments to recover the tax.
3. More information on the $300 billion climate finance fund countries agreed at COP29 in 2024 is available here. It is worth noting that many experts and campaigners, including the Tax Justice Network, agree that the fund is too small to meet countries climate finance needs. A study published earlier this year by the Tax Justice Network found countries can raise the trillions needed to cover a wider range of estimates on countries’ climate finance needs with billions left over to spare on domestic needs by curbing global tax abuse and minimally taxing the upper crust of extreme wealth of the superrich.
4. By hiding the identities of multinational corporations increasingly cheating on tax, the global gag order allowed to go unnoticed a dramatic escalation in corporate tax abuse by US multinational corporations set loose by Trump’s 2017 Tax Cuts and Jobs Act, which the Tax Justice Network’s report exposes today. US multinational corporations were shifting twice as much profit out of countries where they operate and into the US in 2021 than they were in 2016 before Trump’s tax cut act. However, despite the record levels of profits being rerouted into the US from around the world today, multinational corporations are paying less tax to the US government than they were before Trump’s act. US multinational corporations are today booking 74% more profits in the US compared to 2016, but shockingly, paying 8% less tax compared to 2016. US multinational corporations are now responsible for 29 per cent of all corporate tax losses suffered annually by all countries, and have cost countries – including the US – a total of $495 billion in lost corporate tax from 2016 to 2021. The US is by far the biggest loser to US multinational corporation’s Trump-sponsored escalation, having lost over $271 billion in corporate tax from 2016 to 2021 – which is more than half of all the tax losses suffered to US multinational corporations in this time.