UK Chancellor In Talks With US Over Trump Revenge Tax Plans

The British government has initiated discussions with the Trump administration regarding potential exemptions for UK companies from proposed ‘revenge taxes’, according to Chancellor Rachel Reeves. During recent talks in London with US Treasury Secretary Scott Bessent, the focus centred on the White House’s threatening stance towards nations deemed to operate discriminatory tax systems.

The controversial measures, outlined in Trump’s One Big Beautiful Bill, would grant the White House authority to impose withholding taxes on foreign companies and investors holding US assets, including stocks and government bonds. This move represents a direct response to what the US administration perceives as unfair taxation practices globally.

Speaking at The Times CEO Summit, Reeves emphasised the UK’s position, stating, “It would not be right to target UK companies. We are working through the White House’s concerns and hopefully we will find a way through this.” The Chancellor maintained that British tax policies are non-discriminatory, whilst acknowledging American apprehensions about certain aspects of the UK tax framework.

The situation has broader implications for European Union member states, with some privately expressing concerns to Brussels regarding the planned implementation of a 15 per cent minimum corporate tax on multinationals. This rate is scheduled to take effect in both the EU and UK from January 1, despite the US withdrawal from the Organisation for Economic Co-operation and Development agreement on multinational tax avoidance.

The UK’s decision to retain its digital services tax, even after securing a partial tariffs agreement with the US last month, has added complexity to the negotiations. Reeves emphasised that while the revenge tax implementation would ultimately rest with the US Treasury, the UK government would “make the case very strongly on behalf of the UK economy and businesses that this should not be applied to us.”