Sunak hails 'historic' tax agreement but there's still a long way to go - here's why

ITV News Political Correspondent David Woods explains when the tax will come into effect

Rishi Sunak has hailed his G7 agreement as "historic" and says it will level the playing field as far as tax is concerned.

This is only the start of a journey toward making a wider global commitment over corporation tax, but is a very significant move and one that has proved elusive for a while now.

For years the world's major economies have argued about the best way to ensure tax by tech giants is paid at the right rate to the right countries.

The next step is for the G20 nations to sign off the move - and that won't be easy.

Countries like being able to change how much tax they charge on profits as that can make their country more attractive to major companies.

When G7 leaders attend a meeting in Carbis Bay in Cornwall next week - chaired by Boris Johnson - they too will discuss today's agreement. Some critics will argue that the agreed minimum rate is high enough, while Joe Biden had hoped for higher.

Rishi Sunak on the 'historic agreement':

For Mr Johnson, and the government, the G7 presidency is huge. It is his opportunity to show what he means by "global Britain" and how the UK will work (post Brexit) on the international stage.

Today's agreement will be seen as a sign of how the UK is willing to work with our countries to reach a common goal.

Mr Johnson wants to use the presidency to encourage the other nations to increase work to combat climate change and to set an example to the rest of the world - an agreement on how to achieve that will be tougher to reach than today's on tax.

However, the tax agreement does set the tone for next week's discussions, with the G7 countries putting differences aside to come together on major issues that affect them all. This is only the start in changing global tax rules and there is a long way to go, but this is a very significant moment for the business world - it could change the way some taxes are gathered for decades to come.

And in a time when governments are spending shed loads of cash on dealing with the pandemic, any new source of tax revenue that doesn't hit voter's pockets will be welcomed.