Tech that!

New UK law to tax web giants’ mega-profits

TAX-avoiding tech giants were blasted last night as MPs prepare to slap them with a sales levy.

The Commons today debates the final stages of the Finance Bill, including the first Digital Services Tax.

It will pave the way for a 2% levy on the revenues of search engines, social media firms and online marketplaces “deriving value” from British users.

The aim is to curb tax avoidance by huge multi-national web companies.

Campaigners estimate five of the biggest – Google, Apple, Facebook, Microsoft and Cisco – avoided tax totalling £1.3billion in 2018. Critics accuse such companies of using loopholes to move cash around countries, legally minimising what they pay.

Opponents believe this enables the giants to pay less tax and gives web firms an unfair advantage over actual shops, with high streets hammered.

The £1.3billion figure came in a TaxWatch study, released this year, of corporation tax on profits. It estimated

the Big 5 had UK profits of £8.1billion in 2018 but paid only £237million in taxes on them, an effective 2.9% rate.

Fair Tax Mark last night branded the 2% levy as “pretty tame”.

TaxWatch said: “Britain must continue to push for international reform to ensure the billions in profits that US multi-nationals rip off UK taxpayers is taxed properly here.”

All the firms deny any wrongdoing and insist they pay all taxes due.

Labour will table an amendment to

the Bill, forcing ministers to tell MPs each year how much the tax is raising.

Shadow Chief Secretary to the Treasury Bridget Phillipson hopes this will reveal if the levy succeeds in pumping extra cash into the Treasury – or whether web giants have found new ways to avoid paying.

Boris Johnson has said the tax is required because “the big digital firms need to make a fairer contribution”.