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Philip Hammond plans to ‘go it alone’ in bid to tax internet giants as global action fails to materialise
- Chancellor frustrated with EU progress on internet giants paying fair share of tax
- Phillip Hammond will force big online companies to pay more money to Britain
- Britain’s high streets are being decimated by increasing business rates and costs
Phillip Hammond is planning to ‘go it alone’ and impose a tax on internet giants as the European Union drags its feet.
The Chancellor had hoped for international action to ensure technology firms pay their fair share of tax around the world.
But Treasury officials said he had become ‘deeply frustrated’ at delays in Brussels amid concerns in Luxembourg and Ireland over the impact of such a move on their economies.
The Chancellor, above, had hoped for international action to ensure technology firms pay their fair share of tax around the world [File photo]
Both countries have built their prosperity by offering tax shelter to the digital giants.
Mr Hammond is now prepared to take decisive unilateral action to force these firms to pay more into Britain’s coffers.
It comes at a time when Britain’s high streets are being decimated by rising business rates and UK retailers are paying a full whack of corporation taxes. At the same time, a string of major foreign firms have been accused of paying too little tax in Britain.
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This month it was revealed that Facebook paid just £15.8 million of UK corporation tax last year, despite revenues of £1.3 billion.
And Amazon’s warehouse arm, Amazon UK Services, paid only £4.5 million of corporation tax in its most recent financial year.
Britain has favoured a global approach to the taxation of the big West Coast online players to be agreed by EU and the Paris-based OECD – which polices the economies of the world’s most advanced nations. But Brussels has been unable to deliver because of disruption by Luxembourg and Ireland.
Britain’s high streets are being decimated by rising business rates and UK retailers are paying a full whack of corporation taxes. At the same time, a string of major foreign firms have been accused of paying too little tax in Britain [File photo]
A Treasury source said: ‘The Chancellor is deeply frustrated by a lack of action and is prepared to go it alone if required.’
The number of workers paying higher-rate income tax has almost doubled since 2000 as the Treasury failed to increase the threshold in line with inflation.
In 1999-2000, there were 2.5 million higher-rate taxpayers but this had surged to 4.7million by 2016-17.
The 40 per cent tax rate kicks in on any income earned above £46,351 – but if it had risen in line with inflation since the Conservatives came to power in 2010, it would now start at £52,440.
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