Tech giants face new 'digital services' tax following United Kingdom budget

Tech giants face new 'digital services' tax following United Kingdom budget

According to Mr Hammond, the tax will be skewed to social media platforms, online marketplaces, and search engines. He told the Commons on Monday: "It will be carefully created to ensure it is established tech giants rather than our tech start-ups that shoulder the burden of this new tax". It would oblige these companies to pay a 2% tax on sales made in the UK. He stressed that a global agreement on digital tax was the best solution, but expressed concern at the slow progress of talks. The Treasury calculated the cumulative effect of increases in tax thresholds since 2010 at £1,200 for basic rate payers and £1,800 for those paying the higher rate. "But the worry for the tech giants, and their shareholders, is that this is the pebble that starts an avalanche of taxes from global governments", Hargreaves Lansdown analyst Laith Khalaf said. The tax would only apply to profitable companies, but could be abolished if members of the Organisation for Economic Co-operation and Development (OECD) can agree a formula for taxing internet giants.

Iain McCluskey, personal tax partner at PwC, says the chancellor's scattering of a "fistful of cheap, light and airy" personal tax measures was more "tinkering than transformational". The tax will be based on results of self-assessments by the companies.

Scotland's Finance Secretary has pledged to take a "more progressive approach" to income tax than Philip Hammond when he delivers Holyrood's budget.

Politically the digital tax is a win for the Conservative government, though at a time where the United Kingdom needs to make as many friends as possible while going through an expensive divorce, it is an interesting approach. It will target online giants with more than £500m in global revenues.

Amazon, other tech giants face United Kingdom 'digital services tax'
Mr Field said cuts for families would in fact get "worse next year and worse the year after and worse the year after that". There's perhaps a one in three chance of that. "It leads to a reduction in revenue and people voting with their feet".

The oil and gas industry will benefit from continuing support by retaining the headline tax rates at their current level, he added.

"Everything is overshadowed by the damaging impact that Brexit will have on the UK's public finances and the skilled workers available to run public services".

Criticised by Mr Corbyn for choosing a "tax cut for higher earners" rather than ending a benefit freeze, she replied: 'On Monday, he said cutting taxes for 32 million people was frittering money away on ideological tax cuts.

The European Commission, in March, suggested that a blanket 3% tax be applied on digital companies that had annual worldwide revenues of €750 million (US$925.6 million) and EU revenues of €50 million.

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