British Chancellor of the Exchequer George Osborne has announced a new "Google tax" to stop multinational companies from dodging tax on their UK profits. The new 25 percent tax was announced during the chancellor's autumn statement.

Speaking to parliament, Osborne said that multinational businesses needed to pay their fair share. The new tax is designed to close a loophole that allows companies to avoid paying tax on profits generated in the UK. The 25 percent tax is known as the "diverted profit tax."

"Today I am introducing a 25 percent tax on profits generated by multinationals from economic activity here in the UK which they then artificially shift out of the country," the chancellor said. "That's not fair to other British firms. It's not fair to the British people either. My message is consistent and clear. Low taxes; but taxes that will be paid."

The chancellor said that the new tax would raise £1 billion ($1.57 billion) over the next five years and was aimed at companies which pay too little tax. It will be applied using a rate of 25 percent beginning April 1, 2015.

The tax will hope to stop companies from "artificially" diverting profits offshore, Osborne claimed. As yet there are no details about how the tax will work or how the taxman will decide when profits have been diverted. Financial experts at Deloitte said that details of how the new tax works will be released on December 10.

Many multinational companies are currently using legal means to dodge tax, and there have been calls for the government to intervene. Amazon, Google, and Starbucks have all faced widespread criticism for how little tax they pay on huge UK profits. But with no global agreement on how multinational corporations should be taxed, doing so could be difficult.