Chancellor Phillip Hammond has referred to as for a deeper have a look at how tech giants corresponding to Google and Fb are taxed.
Mr Hammond mentioned there was a necessity to think about interim measures, corresponding to taxing revenues, moderately than income.
He first addressed the subject within the Autumn Finances, amid issues the present system doesn’t tax corporations the place they make their cash.
He mentioned the federal government hoped to discover a resolution together with different worldwide companions, together with the EU.
One other space he singled out for consideration was on-line promoting.
He mentioned that, though on-line platforms and marketplaces have been good for the economic system and for customers, the best way tax was paid on these transactions wanted to be checked out to make sure the correct quantity was being paid.
Mr Hammond mentioned some companies have been avoiding paying VAT on gross sales, however he added that others have been merely unfamiliar with paying taxes as this had been carried out on their behalf.
“Some individuals who earn cash from utilizing these platforms could by no means have earned cash with out an employer to behave as an middleman between them and HMRC earlier than, and might discover it obscure and meet their tax obligations.”
‘Menace to equity’
Mr Hammond mentioned the tech sector employed greater than 1.5 million folks and accounted for £6.8bn of funding in 2016, 50% larger than another European nation.
In a session paper, revealed to go together with the Spring Assertion, the chancellor mentioned he hoped to focus on the measures in such a means that it didn’t hurt start-ups and rising corporations.
The large, world digital corporations pay little tax within the UK. As an alternative they channel gross sales by way of nations with extra beneficial tax regimes, for instance, Eire and Luxembourg, one thing that has spurred public protests in recent times.
Mr Hammond warned that the present taxation of multinational giants posed a risk to the entire system.
“The present misalignment between the place digital companies are taxed and the place they create worth threatens to undermine the equity, sustainability and public acceptability of the company tax system,” he mentioned.
Mr Hammond mentioned he hoped this weekend’s forthcoming summit of the G20 developed nations in Argentina would assist to set out some concrete steps for reaching that.