Philip Hammond vowed to make tech giants pay their “fair share” of tax in yesterday’s Spring Statement.
The Chancellor of the Exchequer said after already responding to concerns about unfairness in the tax system with the new digital services tax in the last budget, the government now needs to “adapt our regulatory environment to ensure that competition works for consumers in the digital marketplace, as it does in the real marketplace.”
Welcoming Professor Jason Furman’s report, published yesterday, which reviews competition in the digital market and sets out far-reaching recommendations, including new powers for consumers and an overhaul of competition regulation, Hammond said: “As a first step towards implementing reforms, I am asking the Competition and Markets Authority to undertake a market study of the digital advertising market as soon as possible.
“The UK will remain a great place to do digital business, but it will be a place where successful global tech giants pay their fair share, where competition policy works in consumers’ interests, and where the public are protected from online harms. Under this government, Britain will lead the world in delivering a digital economy that works for everyone.”
Publishers Association c.e.o. Stephen Lotinga welcomed Hammond's commitment on making tech companies pay their fair share, but warned the Chancellor missed an "open goal" on VAT for digital publications.
Lotinga said: “The Chancellor’s commitment to look further at competition in the digital economy following the publication of the Furman review was welcome and we look forward to working with Government to ensure that digital markets are fair, transparent and work in the interests of UK readers. It was also positive that the Chancellor announced an exemption for PhD-level occupations from the cap on high-skilled visas which should go some way to ensuring that the UK’s world class research sector continues to attract the very best talent.
“However, the Chancellor missed an open goal yesterday in not zero-rating VAT for digital publications. Reasserting that we are society that doesn’t tax reading and knowledge would have been a popular and timely decision. We very much hope he will reconsider for his Autumn Budget.”
Last year booksellers urged the government to act quickly on the so-called Amazon tax to help “rebalance the playing field” between physical and online retailers.