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UK Digital Services Tax To Commence On 1st April

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The UK government has confirmed that a Digital Services Tax of 2% will be put in place from 1st April.

The Digital Services Tax will apply to a group’s businesses that provide a social media service, search engine or an online marketplace to UK users. These businesses will be liable to Digital Services Tax when the group’s worldwide revenues from these digital activities are more than £500 million and more than £25 million of these revenues are derived from UK users.

If the group’s revenues exceed these thresholds, its revenues derived from UK users will be taxed at a rate of 2%.

There is an allowance of £25 million, which means a group’s first £25 million of revenues derived from UK users will not be subject to Digital Services Tax.

By the end of the 2025 financial year, HMRC said the tax could generate an annual income of £515m.

Learn more about the tax here.

Source : Insight DIY Team

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15 March 2020

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