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Sunak hits tech giants with digital services tax


From 1 April 2020, the government will introduce a 2% tax on the UK revenues of large, multinational search engine, social media and online marketplace providers.

18th Mar 2020
Staff Writer AccountingWEB
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Originally announced in the 2018 Budget, last week’s Budget speech confirmed that the digital services tax (DST) would go ahead despite concerns from UK businesses over potential retaliation from the US government.

The tax will apply to businesses that earn more than £500m in worldwide revenues from social media, search engines or online marketplaces. The first £25m of a company’s UK revenue from these services will not be subject to the digital services tax, but any amounts earned above that threshold will be taxed at 2%.

The digital services tax is a political response to low rates of corporation tax paid in the UK by tech giants such as Google, Facebook and Amazon. The measure is designed to ensure “the amount of tax paid in the UK reflects the value these businesses derive from their interactions with, and the contributions of, an active user base”, the Budget 2020 report explained.

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Replies (4)

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By bobsto12
19th Mar 2020 09:24

It's not a situation that can be allowed to continue. By not paying taxes they are wrecking the societies they profit from.
You'll never get them to change on their own, the greedy never do.

Thanks (1)
By RogerMT
19th Mar 2020 09:38

Not before time. Ironic how this Tory government is introducing a socialist tax, that had it been introduced by a Labour government (it was Labour's idea, after all), would have been howled down from the rooftops.
Keep safe, people!

Thanks (0)
By Meltonmark
19th Mar 2020 11:43

So, the tech giants will introduce a surcharge on their servies, just like the thieving power companies did...Climate Change Levy... that just disappears into someone's pocket. Nice one, Sunak.

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By chrisowen
19th Mar 2020 15:38

The expected windfall of £65m seems rather low. Does anyone have an estimate of the lost corporation tax that these companies should be paying ?

Thanks (0)