Spring Statement 2019: Going it alone on digital tax risks undermining global efforts warns RSM

Commenting on today's Spring Statement, George Bull, senior tax partner at RSM said: 

'The Government has today announced that it will soon publish a summary of responses to its recent consultation on plans for the implementation of a Digital Services Tax from April 2020. 

'The Chancellor had previously said that the UK was looking at introducing a Digital Services Tax in the absence of a collective global movement to do so, and the upcoming publication of these consultation responses should provide a useful indication of how workable such a tax might be in practice. 

'However, since the Chancellor's previous statement, the EU has dropped plans for an EU-wide Digital Services Tax following objections from various member states, and now seems to be backing OECD efforts to achieve a global consensus on how to tax an increasingly digital economy.

'We therefore question why the UK government seems to be persisting in its policy of going it alone. There is also the risk that gaps and overlaps between a future UK system and its OECD counterpart will provide further scope for tax abuse. At the very least, a global problem merits global attempts to develop a solution. Only if those attempts fail should individual countries implement their own taxes.'