UK.gov fishes for likes as it prepares to go solo on digital sales tax

www.theregister.co.uk | 11/12/2018 | Staff
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Critics have complained that the UK government's proposed digital services tax is complex, confusing and off-putting for international business.

Announced by chancellor Philip Hammond in the budget, the tax aims to address what UK lawmakers see as holes in the international tax framework, which they say fails to recognise the value that UK users generate for digital firms.

Charge - Cent - Levy - UK - Revenues

The charge will be a 2 per cent levy on the UK revenues of parts of digital businesses that derive "significant value" from UK users.

The government is insistent that it only wants to tax large multinationals and has set out terms to try and ensure that small businesses aren't in scope.

Firms - £500m - Revenues - Business - Activities

It will apply to firms that generate more than £500m in global annual revenues from in-scope business activities, and more than £25m in annual revenues from qualifying activities linked to the participation of UK users. There will be no tax on the first £25m of UK taxable revenues.

Spreadsheet Phil hopes that it will bring in £5m in 2019-20, rising to £275m the next year and to £440m by 2023-24. The government said there would be both one-off and ongoing costs for administering the tax, but didn't provide a figure.

Measures - Welcome - Month - Complaints - Light

The measures didn't receive a particularly warm welcome when they landed earlier this month, with complaints that – in light of Brexit – the UK shouldn't be making it more unappealing for digital firms to set up shop. Critics also questioned why the UK wasn't focusing on pushing for an international agreement, and whether the measures were simply too complicated and confusing.

The government has now issued a consultation – open until 28 February – on the proposed changes, asking for opinions on a range of areas.

Focus - Companies - Participation - Government - Areas

The main focus is on companies that benefit from user participation. The government defines four areas in which people create value...
(Excerpt) Read more at: www.theregister.co.uk
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