Tech Giants To Fork Out Service Tax For Sales In UK Budget

From April 2020, Philip Hammond, UK chancellor, wants to introduce a digital services tax which will force technology giants like Facebook and Amazon to pay a lot more tax than they do. He said that start-ups won’t be targeted but these big companies as it is only unfair to let such huge profit-making firms function and pay only a small amount of tax. The European Commission and the 36-member OECD have been trying to come up with a plan for imposition of digital services tax on search engines, internet marketplaces and social media platforms. The proposed number is 2% against sales made by the firms in UK.

Tech Giants To Fork Out Service Tax For Sales In UK Budget

These companies currently pay taxes on UK profits, which is a lot lower than revenues. The Treasury estimates the generated amount to be £275m in 2019-20 which is again expected to rise to £370m the next year. The number will probably rise to £400m in 2021-22 and £440m in the following year. This tax will be imposed on firms that make profits amounting to a minimum of £500m per year in global revenue. Although Hammond didn’t specifically name any company, Facebook, Google and Amazon have been under heavy criticism for the relatively small tax they pay in the United Kingdom.

Julian David of TechUK contradicted Hammond’s promise to protect start-ups saying that keeping a profit threshold of £500m put small companies at risk too. This move could also mar UK’s reputation of being the best spot for investment or starting a tech business. In spite of the date of levying being forecasted as April 2020, the plan might fall through if Europe charges firms at their own digital tax of 3%. Zubin Patel of Deliotte said that the proposal in still under consultation. Until an international deal is reached, levy on UK sales of digital companies will be implemented. The OECD will provide updates on the plan in 2019 and intends to submit the final report in 2020. Chris Sanger of EY says that Hammond will review the UK digital services tax in 2025.

TechUK fears that going through the plan without support could be risky, especially when the Treasury is still doubtful if the implementation of the tax will be properly executed. The chancellor might be hoping for an international agreement to surface before implementing the UK tax. Hammond’s statement clearly shows that owing to ‘painfully slow’ progress on the international front, when it comes to introduction of a digital tax, the UK is all set to strike out on its own.

Lawrence Field of Crowe UK says that not having votes make global firms easy targets. He believes that the move could be risky at a time when the UK is attempting to form closer trade relations with the US before Brexit. Also Dan Neidle fears disapproval from the Trump administration about the UK digital services tax.

Amazon Music Now Accessible On Xbox One

The November update by Microsoft for Xbox One consoles offers a plethora of new changes and capabilities, comprising the capability of directly streaming from Amazon Music.

Amazon Music Now Accessible On Xbox One


The application is accessible for Xbox One consumers from this week for users located in the United States, as per a media release. More nations are likely to be included “soon,” but there is not a solid launch date just yet. Amazon Music joins Pandora, Spotify, YouTube, and iHeartRadio as applications that people can employ to stream music. Amazon Prime users can employ the new Xbox One application to stream at no additional cost from their library, as per Microsoft. The application is available now in the Xbox Store.

On a related note, Microsoft earlier claimed that it is operating on its next-gen Xbox console that is likely to arrive in two parts. This might be a conventional gaming console and a lower-fueled console that might run on Scarlett Cloud (the firm’s cloud computing platform), as per the media report.

The conventional console might operate with domestically processed games. On the other hand, “Scarlett Cloud” will stream games from cloud computing service of Microsoft named Azure, claimed the media in its report. The costing and specifications of the conventional console are being rumored to be in its early developing stages, but the streaming Xbox that might be powered on Microsoft Azure is expected to have a less price tag in comparison to the conventional console.

Microsoft declared earlier this year in the E3 (Electronic Entertainment Expo) that they are operating on next-gen gaming consoles. “This might lower latency in all aspects of the game too. If a multiplayer game is employing Azure as its major server, the console working on ‘Scarlett Cloud’ will be nearer physically to the multiplayer server leading to less latency,” claimed the report.