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Sept. 29 (Bloomberg) -- U.K. Chancellor of the Exchequer George Osborne warned “some of the biggest technology companies in the world” to stop using loopholes to avoid paying tax.

Osborne used a speech to his Conservative Party’s annual conference in Birmingham, central England, to pledge action to block mechanisms including artificial transactions that reduce U.K. profits and therefore tax liabilities.

“Some technology companies go to extraordinary lengths to pay little or no tax here,” Osborne told delegates today. “If you abuse our tax system, you abuse the trust of the British people -- my message to those companies is clear: We will put a stop to it.”

Companies including Amazon.com Inc. and Google Inc. were summoned before U.K. lawmakers last year to explain their use of complex accounting methods to reduce their tax liabilities in Britain. Prime Minister David Cameron warned in Davos, Switzerland, in January last year that the companies should “wake up and smell the coffee because the public who buy from them have had enough.”

Technology companies “are welcome here in Britain with open arms, you have the advantages of our skilled population to work for you, broadband connections to deliver your services and our NHS to keep your employees healthy,” Osborne said, referring to the state-run National Health Service. “These are advantages that must be paid for.”

Britain has “some of the lowest business taxes in the world,” Osborne said. “We expect those taxes to be paid, not avoided.”

The chancellor will outline plans in his Autumn Statement to Parliament on Dec. 3 to improve the enforcement of international rules on the pricing of companies’ internal transactions in order to ensure tax on diverted profits is paid in Britain, according to a Conservative Party briefing note.

--With assistance from Svenja O’Donnell and Robert Hutton in Birmingham, England.

To contact the reporter on this story: Thomas Penny in Birmingham, England at tpenny@bloomberg.net To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Eddie Buckle, Andrew Atkinson

Bloomberg