Autumn Budget 2018: Chancellor announces UK Digital Services Tax
Chancellor Hammond has made a pre-emptive move in order to impose a tax on the UK generated revenues of tech giants, explains legal director Cathy Bryant. Called the UK Digital Services Tax, the Chancellor has moved despite the international community not having reached a unanimous position on this matter. The detail is still to be worked out, but the Digital Services Tax is aimed at tech companies with global revenues in excess of £500 million, will be introduced in April 2020 and is predicted to net the UK purse some £400 million per annum.
Commenting on the 'digital tax' Cathy said: "Obviously, the competitive environment of the UK must be balanced carefully with the implementation of this tax. If the UK moves in advance of the rest of the international community, it could lead to a flight of profit from the country. This is possibly one of the reasons why the implementation is delayed to 2020. If the international community reach agreement in the interim, the Chancellor has stated his intention to consider adopting that route rather than implementing the UK Digital Services Tax."