CHANCELLOR Rishi Sunak will seek exemption for financial services firms in London from a new global tax system, agreed last week by the G7 member nations.
Proposed by US president Joe Biden, the new tax plan aims to "redistribute" the profits of the world’s 100 largest businesses, such as Google, Amazon and Facebook.
Sunak is concerned the new system could prove to be a significant deterrent to banks in London, compounding the impact of Brexit that resulted in a shift of financial trading to Amsterdam, The Guardian reported.
It is unclear whether all forms of financial services – from banks to investment funds, insurers and hedge funds – would be excluded in a process still to be negotiated.
“There is an assumption by a number of countries that there would be an exception for financial services. The question is now how you manage these exceptions without all the complexities they bring,” Chris Sanger, the global government and risk tax leader at the accountancy firm EY, said.
Sunak praised the tax agreement when G7 finance ministers agreed the framework last Saturday (5), adding that it would force “the largest multinational tech giants to pay their fair share of tax in the UK”.
The gaps in the deal will be discussed at length between the broader G20 group of countries – including China, India and Brazil – at meetings in Venice next month, the newspaper said.
The changes will then be negotiated between 139 countries in a process overseen by the Organisation for Economic Cooperation and Development, (OECD) with the aim of reaching a final agreement by October.
A spokesman for UK Finance, said “We believe the taxation system should seek to ensure the UK remains an attractive place to do business, is globally competitive and enables the UK banking and finance sector to support the economic recovery.”
TikTok is to lay off hundreds of employees from its London office, with the bulk of the cuts affecting content moderation and security teams, according to reports estimating over 400 job losses by the Communication Workers Union. Online safety campaigners, along with TUC and CWU leaders, have urged Chair Chi Onwurah MP to investigate the impact of TikTok’s actions on UK online safety and workers’ rights.
The strategic shift is part of a broader reorganisation of TikTok's global trust and safety operations, aiming to streamline processes and concentrate operations in fewer locations worldwide. The move has prompted significant criticism from safety advocates and politicians, raising concerns about the platform's commitment to child protection and online safety.
Safety roles cut
People working in the trust and safety team are most likely to lose their jobs as part of a global restructuring that prioritises AI- assisted moderation over human oversight. TikTok is moving UK content moderation roles to Europe as it rely on AI, putting hundreds of jobs at risk despite rising regulatory pressure under the Online Safety Act.
The timing is particularly controversial given recent revelations about platform safety failures. Report from Global Witness, a not-for-profit organisation have accused TikTok of "sacrificing online safety" through these AI-driven cuts, with investigations revealing that the algorithm has directed minors toward explicit content a serious breach of child protection standards.
The Communication Workers Union and online safety professionals have urged UK MPs to investigate the restructuring, warning that job losses could expose children to harmful material. The cuts represent a fundamental shift in TikTok's operational philosophy, prioritizing cost efficiency over comprehensive content review.
TikTok's restructuring putting several hundred jobs at risk marks a significant move as it shifts to AI-assisted content moderation. While the platform claims the changes will improve efficiency, the decision has sparked debate about whether algorithmic moderation adequately protects vulnerable users. As regulators scrutinise social media platforms increasingly, TikTok's focus on automation rather than human expertise may face mounting political and regulatory challenges in the UK and beyond.
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