'Tech giants such as Amazon and Google could be handed hefty bills in future under a major shake-up of the UK tax system.
The new rules would aim to stop the world’s biggest technology firms raking in billions from sales but only handing tens of millions of pounds to the Treasury.
At the moment corporation tax is levied on profits. This means multinational companies can artificially reduce their UK bills using complicated company structures.
But changes being considered by the Government could see the firms taxed on their sales instead. Mel Stride, the Financial Secretary to the Treasury, yesterday said a tax on revenue – one of several options being looked at – was ‘the preferred route’.
He said current rules meant big tech companies are not being taxed fairly. ‘At the moment they are generating very significant value in the UK, typically through having a digital platform with lots of users,’ he told the BBC.
‘That is driving a lot of value, so you’re looking at social media platforms, online marketplaces, internet search engines – where the tax regime is not taxing those activities fairly. We want to move to a situation where we are taxing those activities fairly.’
The world’s biggest technology companies have faced mounting criticism over their tax affairs. Apple’s UK retail arm raked in sales of more than £1billion in 2016 – but recorded only £17.6million profits. This meant it paid just £13.8million in tax, a little over 1 per cent of sales.
Internet shopping giant Amazon reported sales of £7.3billion in the UK in 2016 – but its service arm paid no tax on a profit of £25.6million thanks to a complicated series of deductions including share awards to managers.'
Read more: Amazon and Google could be handed huge bills in a major shake-up of the UK tax system
Did you like this article?
Thank you for your vote!
7 December 2018
New tax on over-40s being considered by ministers to fund social care would raise £15bn a year, study finds
From our advertisers
48 minutes ago
War criminal IDF chief turned PM candidate touts body count & bombing Gaza into ‘stone age’ in campaign ad
From our advertisers