2% tax on web giants in bid to revive high streets
GOOGLE, Amazon and Facebook will be slapped with a new tax in a desperate attempt to revive flagging high streets, the Chancellor announced.
Web giants will face a 2% Digital Services Tax after ministers became frustrated at a lack of global action against tech firms, but critics say the move does not go far enough.
It comes after our High Street Fightback campaign and our revelation that a glaring tax gulf between shops and online rivals has fuelled the loss of 140,000 jobs this year.
Philip Hammond announced a series of moves aimed at boosting town centres during his Budget speech.
He also slashed business rates for small shops, pubs, cafes and restaurants who struggle to compete against online giants.
Web firms which generate at least £500million a year in worldwide sales face a 2% tax from April 2020.
The Digital Services Tax will generate £1.49billion between April and March 2024, including £440million a year by 2023-24, experts estimate. About 30 search engines, Ron Green, 86, and wife Sue live in Thetford, Norfolk. They have three grown-up children and six grandchildren.
They describe themselves as “muddling along” financially, but only because they have a good family who support them a lot.
And they shop for bargains on food and bills. Sue, 75, says: “We have to be clever with our cash to make ends meet.
“There is no money for treats. If we wanted to go out for dinner social media platforms and online marketplaces will be hit. For example, Amazon will have to pay 2% on what it takes from sales.
Facebook’s UK tax bill last year was £15.8million on revenue of £1.2billion but it paid just £7.4million thanks to a tax credit.
Mr Hammond said: “It’s not sustainable, or fair, that digital platform businesses can generate substantial value in the UK without paying tax in respect of that business.”
Treasury sources insisted customers will be protected from rising prices.
Critics pointed out that £440million a year from 30 firms was an average £14.6million each.Angry Labour MPs accused Mr or socialise we wouldn’t be able to afford that. Energy is a worry as prices keep going up.
“We turn it down and put on an extra layer to help keep bills low. Food is expensive but using discount stores means we can make our money go a bit further.
“We’d love to be getting the newer, bigger state pension, but it just seems to be cuts for us.
“A bit of a break from financial pressures would be good. We worry about unexpected bills.” Closed high street shops Hammond of letting firms off the hook. Shadow Digital Secretary Tom Watson said: “The measure is pittance for these massive international companies. The lack of ambition in this announcement is derisory.”
Former Public Accounts Committee chair Margaret Hodge called it “gesture politics”.
Mr Hammond also gave struggling high street traders a business rate cut.
Those with a rateable value of £51,000 or less will have their rates slashed by a third from April. It is worth up to £8,000 for 90% of independent shops, pubs, restaurants.
Management consultant Altus Group said it “does nothing” to help medium and large store chains which face a £128million surge in rates next April, when increases kick in.
British Retail Consortium chief executive Helen Dickinson said: “The majority of the UK’s 3.1 million retail workers are employed in businesses that will not benefit.” Storm Macauley-Leak, 27, has had to move back in with her parents near Cambridge.
The recruitment industry worker is frustrated at the hard slog to try and get on the property ladder.
She says: “It’s a bit depressing having to move back home at my age, I really want my independence.
“But that’s my only chance to try and save towards a deposit for my own home. I can’t throw any more money away on extortionate rents.
“I’m disappointed that nothing in the Budget has helped me out. It’s a case of thanks for nothing – yet again.
“Wages aren’t keeping up with the rising cost of living.
“Essential bills keep going up from energy, food and rent to petrol and travel costs and lots of young people like me simply can’t afford to live, let alone try and save.”