Government digital services tax takes aim at Google, Amazon and Facebook

Philip Hammond the Chancellor

Philip Hammond the Chancellor

In a Budget signalling a major shift in the Government's priorities, the Chancellor declared on Monday that he would end austerity by slashing income tax for £32million earners, and launched a £100billion spending spree on public services.

Improved deficit and upgraded growth forecasts allowed the Chancellor to loosen the purse strings, releasing more than £100billion to cut taxes and increase spending.

The tax, levied at two per cent of UK-derived revenues, was unveiled by Chancellor Philip Hammond during the Budget on Monday and is meant to raise around £400m from companies operating as search engines, social media platforms, and online marketplaces.

The IFS and Resolution Foundation think tanks both said rises in income tax thresholds would benefit the wealthy more than those less well-off, with a typical higher rate taxpayer gaining £176 a year and a basic rate payer gaining just £24.

Philip Hammond has gambled with public money by using a fiscal windfall to splurge on the NHS - and could take the country down a path of higher debt and taxes, experts have warned.

He said: "I always thought the Chancellor was a bit iffy about Brexit but how wrong I was".

He said: "The Tories have once again chosen tax cuts for the richest in society, we will choose a fair, more progressive path and I will set out the details in the Scottish Budget on December 12".

"I've approached this budget in terms of delivering to the British people a clear view of the better times that are ahead as our economy and public finances turn the corner".

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Britain had been leading attempts to reform worldwide corporate tax systems, Hammond said, but progress had been painfully slow and governments could not simply talk forever.

Scots now pay income tax at 41p in the pound between £43,340 and £150,000, while in England the rate is 40p and the threshold is £46,350. 'There is one stand-out example of where the rules of the game must evolve now if they are to keep up with the emerging Digital Economy, ' Hammond told Parliament.

"We will consult on the detail to make sure we get it right, and to ensure that the United Kingdom continues to be the best place to start and scale-up a tech business".

The researcher added that this was "no bonanza" and "many public services are going to feel squeezed for some time to come".

Day-to-day spending on all other public services, such as education and police, is set to be "essentially flat", said Johnson, continuing a long-term trend. We are not preparing for another general election.

But he said voters would be "crushingly disappointed" that the Budget did not deliver the end of austerity. "That would not be in the national interest".

Mrs Batters continued: "We are pleased to see that there is a significant £200m investment in piloting new solutions to deploy full fibre internet in rural locations".

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