There was plenty to digest in the 2018 Budget delivered by the UK finance minister Philip Hammond but the big news Tamebay was waiting for related to what has been termed as the “Amazon tax”. And surprisingly we still remain rather in the dark, despite some announcements today.
It’s a misleading name: Amazon Tax. Not least because it would most likely hit small businesses selling on marketplaces, who are playing and paying fair to HMRC. But the name has gained currency as the government seeks to adequately tax multi-national businesses that have enormous revenues and turnover in the UK but don’t pay a great deal of corporation tax owing to how their businesses are structured.
But what, exactly, did the Chancellor say on the Amazon Tax today and what will it mean? He remarked in the House of Commons this afternoon:
The rules of the game must evolve now if they are to keep up with the emerging digital economy. It is only right that these global giants, with profitable businesses in the UK, pay their fair share towards supporting our public services. They pose a real challenge for the sustainability and fairness of our tax system. The rules have simply not kept pace with changing business models and it is clearly not sustainable or fair that digital platform businesses can generate substantial value in the UK without paying tax here in respect of that business.
– Philip Hammond, Chancellor of the Exchequer, HM government
So, where are we now? Still in the dark regarding whatever it is Hammond has in mind, if we are honest. The British Government had announced an intention and aim but hasn’t revealed how the tax in practice will work.
Other measures that will assist High Street retailers were also announced and this new levy will help Bricks and Mortar enterprises in that sense. But essentially, here at Tamebay towers, we remain bewildered by the binary choice.