Europe to probe Osborne tax rule

BRUSSELS launched a probe yesterday into a scheme hatched by George Osborne that allows multinational firms to duck tax-avoidance measures.

EU officials said the investigation, by the European Commission, would examine whether rules signed off by the former chancellor let firms avoid paying tens of millions of pounds in tax.

The changes, made by Mr Osborne in 2013, allow companies to avoid paying UK tax on interest payments made to its offshore subsidiary from another group company located abroad.

The Commission said it wanted to ensure that member states do not give some firms ‘better tax treatment than others’.

It comes after a number of high-profile cases, including a demand for Apple to pay £11.5billion in back taxes to Ireland.

Downing Street yesterday said the scheme was compliant with EU law.