UK advertisers feel pain of levy on Google
GOOGLE is passing on the costs of a new digital services tax to British advertisers, in a move that threatens to undermine the Government’s attempts to claw back some of the revenue generated by the Silicon Valley giant on British shores. Advertisers will be charged an additional 2pc in fees from Nov 1 to cover the costs, the company told customers yesterday.
The digital services tax, which came into effect on April 1, covers internet companies such as Google and Amazon and applies on revenues over £25m for companies with more than £500m in sales worldwide. It is expected to make £400m by 2021, and ultimately raise £500m per year, following years of frustration that foreign technology giants are able to book their profits from sales or advertising in the UK overseas.
Amazon has also passed the cost of the digital services tax on to its sellers in the UK with a 2pc rise in fees that came into force yesterday.