UK Budget To Introduce Digital Services Tax


By Global Tax Weekly

Chancellor of the Exchequer Philip Hammond has apparently acquired the nickname in parliamentary circles of “Spreadsheet Phil.” This is suggestive of a man who likes to play around with numbers. A lot. Not the best company at parties, perhaps. A meticulous planner maybe, not given to spontaneous policy announcements. Except that he kind of is. His first Budget as Chancellor was marked by dramatic about-turn on self-employment taxation, and his latest Budget, announced October 30, by a digital services tax, set to commence in 2020. Incidentally, Hammond moved Budget day forward by one day so it wouldn’t be announced on October 31 – Halloween – and suffer a pun-fest at the hands of the media. As it turned out, the 2018 Budget was largely free from tax horrors. But many businesses will surely have been a least a little bit spooked by the proposed digital tax. (Sorry).

For example, while praising the overall tenor of Hammond’s Budget, the British Chambers of Commerce warned the Government to “tread very carefully in introducing a digital services tax.”

“Tight classifications of exactly which businesses will fall under the scope of these new rules are important to avoid unintended consequences or confusion for the industry as a whole,” it said. Hmm. Where have we heard those words before?

What’s more, it certainly seems unhelpful that, even though the UK may no longer be a member of the European Union by the time the tax is introduced, Hammond has chosen to deviate from the outlines of the EU’s own proposals for an “interim” digital services tax.


For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look





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