UK advertiser­s feel pain of levy on Google

The Daily Telegraph - Business - - Front Page - By Margi Mur­phy in San Fran­cisco

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.

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