Some of the globe’s biggest tech companies will have to pay bigger bills as Britain’s government readies to drastically change its tax system.
American giants like Google and Facebook are prepared for the big overhaul of the tax system, after the report where the Treasury said that they could introduce a new tax on revenues.
This would give the government data on the companies’ colossal UK sales figures. Currently profits are being taxed, significantly lower amount.
Thus Google said its sales revenue of 2016 in Britain was £1 bln and a profit before tax – £149 mln. The paid taxes made up £38 mln – much more compared to preceding years after it modified the way it accounted for its activity in the country.
In case a proportion of these sales was taxed the company would have to pay a considerably bigger sum. Likewise it would work with Facebook, another hugely profitable tech firm, which has also started paying more in the UK. Every company that has faced controversy has taken steps to show they adhere to the current tax rules.
The Treasury’s Financial Secretary said in the report that big tech firms should pay a fair sum in tax. Now they are making a great deal of money in Britain, primarily by means of a web-platform with a big number of users, who interact with it, said Mel Stride.