As I set out in a piece for City AM back in 2017, I agree that digital services companies must contribute fairly to funding our vital public services, and that public anger must be acknowledged on this issue.
The way in which businesses work is changing, which is why I am encouraged that the Government is reviewing the taxation of digital companies, to make sure all businesses pay their fair share. The UK is leading international efforts to reform the international rules around where profit is made and where it should be taxed. Pending this global reform the Government is exploring potential interim measures.
At the Autumn Budget 2018, the Chancellor announced that a UK Digital Services Tax will be introduced, targeting tax on UK-generated revenues of specific digital platform business models. This new 2 per cent tax will come into effect from April 2020, paid only by profitable companies which generate at least £500 million a year in revenue, and is expected to raise over £400 million a year for funding public services. Should a globally agreed solution present itself in the meantime, the Government will consider adopting this in place of the UK Digital Services Tax.
I appreciate there is more work to be done, but our country has made great strides towards ensuring businesses pay their fair share and will continue to lead international efforts to reform the international rules.