The government is today (11 July 2019) publishing draft
legislation for the next Finance Bill to deliver on our
Budget 2018 commitment to a competitive and fair tax
system, including updating tax policies for the digital age
by ensuring large digital companies pay their fair share
through a world-leading Digital Services Tax.
This Finance Bill,
published in draft form today, ensures that from April next
year:
- large digital businesses pay a new Digital Services Tax
that reflects the value derived from their UK users
- off-payroll working rules will ensure that two people
working side by side in a similar role for the same
employer pay the same employment taxes
- when a business becomes insolvent, more of the taxes
paid in good faith by its employees and customers will go
to fund public services as intended, rather than being
distributed to other creditors such as financial
institutions
, Financial Secretary to
the Treasury and Paymaster General, said:
The UK has always sought to lead in finding an
international solution to taxing the digital economy.
This targeted and proportionate Digital Services Tax is
designed to keep our tax system in this area both fair
and competitive, pending a longer term international
settlement.
The consultations on the draft legislation will run until 5
September, with measures included in the next Finance Bill.
Respondents can contribute here.
The government has always said that the best solution to
the taxation of digital companies is reform of
international tax rules, and we continue to work through
the OECD and G20 to seek a globally agreed solution. Once
that is achieved we will no longer need our own Digital
Services Tax. Discussions will continue at next week’s G7
Finance Ministers.
Announced by the government at Budget 2018, the
Digital Services Tax is a targeted, proportionate, and
temporary tax that will ensure large digital businesses pay
tax that reflects the value derived from their UK users. It
will not apply to small businesses or businesses making UK
losses – helping to protect start-ups.
The government will legislate for the Digital Services Tax
in the next Finance Bill 2019-20 so that it applies from
April 2020.
Earlier publication of Finance Bill legislation – as part
of the government’s single fiscal event process – allows
more time for scrutiny of tax measures, giving greater
certainty and stability to taxpayers.
