Google funnels profits derived from activities in Britain through its headquarters in Dublin

Britain has decided not to sign up to a key plank of the international accord designed to stop multinationals avoiding corporation tax.

The Treasury has indicated that it will not implement proposed reforms to the rules governing when companies have a taxable presence outside their home country.

These changes to the rules on so-called permanent establishment are one of the central pillars in the overhaul of the international tax system, agreed by the Organisation for Economic Co-operation and Development (OECD) last year. The new guidelines are due to be signed off by nearly 100 nations in June.

The UK’s decision to opt out of the changes to the permanent establishment rules could irritate other large nations.

Theresa May has pledged to rein in tax avoiders