// High streets minister Jake Berry promises to extend Digital Services Tax to online retailers
// The 2% tax aims to save the UK’s high streets
High streets minister Jake Berry has pledged to extend the Digital Services Tax to online retailers via a two per cent tax in order to rescue the UK’s high streets.
Berry said the digital tax – which was announced in the Budget in October – will be extended if the government is unable to secure an international agreement after Brexit.
“We will come forward with our own two per cent tax on online retail to ensure that we can continue, as we did in the last Budget,” Berry said.
The initiative means that media companies and search engines will have to pay two per cent tax on the advertising revenue earned from UK.
Meanwhile, online marketplaces will pay tax on the “platform fee”.
Moreover, Centre for Retail Research’s professor Joshua Bamfield predicts online sales will account for 30 per cent of total retail spend towards the end of the next decade.
“This year we have already slashed a third off business rates of shops with a rateable value of under £51,000,” Berry said at a parliamentary session in the House of Commons last week.
The news comes after the Chancellor Philip Hammond signalled last summer that the government was listening saying “we want to ensure that taxation is fair between businesses doing business the traditional way and those doing business online”.