The UK's Digital Services Tax (DST) raised £358 million from large digital
businesses in the 2020/21 tax year, according to data published by the National
Audit Office (NAO).
The DST was introduced in April 2020 to combat the government's fears that the
international tax system 'did not recognise the value being generated for
digital companies through UK online users'. The tax targets firms that make
large revenues from UK users of social media platforms, online search engines
and online marketplaces.
The NAO found that HMRC collected 30% more DST in its first year than originally
predicted. It said that most firms that are liable for the tax now pay more in
DST than corporation tax.
Gareth Davies, Head of the NAO, commented:
'The DST has succeeded in raising more tax from some big digital companies
and has brought in more money than forecast in its first year. However, HMRC
could still face challenges enforcing compliance, especially among groups
without a physical presence in the UK.
'It should ensure that big digital companies operating beyond the UK's
borders are aware of the tax and comply with it.'
Internet link: NAO website