In Brief

‘Shameless’ tech giants ‘exploit coronavirus to dodge tax’

Industry body calls for government to delay new levy by a year

Technology giants have been accused of exploiting the coronavirus pandemic to avoid paying a new tax that came into force this month.

TechUK, an industry lobby group which represents hundreds of technology companies, says the government should “look again” at the digital services tax and “give companies a bit more breathing space” by delaying liabilities for a year.

Antony Walker, the deputy chief executive, said: “The scope of the tax was dramatically extended last month with little warning, meaning that HMRC now expects many more companies across the sector to begin allocating resources to determine liability.”

The new levy, a 2% tax on revenues, is intended to counteract international companies moving their taxable profits offshore. It will apply to at least 30 companies with more than £500 million of global revenues. The Treasury expects it to raise £440 million annually by 2023.

Campaigners said that request from TechUK, which represents the big four of Apple, Facebook, Amazon and Google, was “distasteful” and an example of “egregious special pleading”.

Alex Cobham, chief executive of the Tax Justice Network, a campaign group, said: “This is completely shameless of the tech companies — even by their low standards.”

–––––––––––––––––––––––––––––––For a round-up of the most important stories from around the world - and a concise, refreshing and balanced take on the week’s news agenda - try The Week magazine. Start your trial subscription today –––––––––––––––––––––––––––––––

The Times points out that the companies due to pay the tax - social media platforms, search engines and online marketplaces - are “among the few that are likely to prosper during the coronavirus crisis” as “more business is being directed online”.

The new tax has proven to be controversial in the US. Treasury secretary, Steven Mnuchin, said in January that it discriminated against US multinationals and warned there would be retaliation – probably a tax on UK car exports to the US.

Meanwhile, the Organisation for Economic Cooperation and Development is drawing up global tax rules for the digital economy. Once the new rules are approved, the UK has promised to scrap its tax and adopt the OECD standard.

Recommended

The Covid pill: new taskforce in race to find antivirals
Science laboratory
Getting to grips with . . .

The Covid pill: new taskforce in race to find antivirals

Earth Day: sustainable fashion giving the world a helping hand
Rotaro luxury fashion hire company
Why we’re talking about . . .

Earth Day: sustainable fashion giving the world a helping hand

‘Cheerio, cheerio, cheerio’
Today's newspaper front pages
Today’s newspapers

‘Cheerio, cheerio, cheerio’

‘It’s naive to think working from home will come at no cost to employees’
A man works from home
Instant Opinion

‘It’s naive to think working from home will come at no cost to employees’

Popular articles

What is Donald Trump doing now?
Donald Trump
In Depth

What is Donald Trump doing now?

Ten Things You Need to Know Today: 21 April 2021
10 Downing Street
Daily Briefing

Ten Things You Need to Know Today: 21 April 2021

London mayoral race 2021: who will win?
Night Tube Sadiq Khan
In Depth

London mayoral race 2021: who will win?