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The government is today (11 July 2019) publishing draft legislation for the next Finance Bill, including provision for a Digital Services Tax which will apply from April 2020. 

The bill will be introduced to the House of Commons in the Autumn, shortly after the Budget. We expect it to receive Royal Assent by Easter 2020 and to be enacted as Finance Act 2020. This timeframe is subject to there not being a general election in the meantime.   

The press release says that the Finance Bill, published in draft form today, ensures that from April next year:

  • large digital businesses pay a new Digital Services Tax that reflects the value derived from their UK users
  • off-payroll working rules will ensure that two people working side by side in a similar role for the same employer pay the same employment taxes
  • when a business becomes insolvent, more of the taxes paid in good faith by its employees and customers will go to fund public services as intended, rather than being distributed to other creditors such as financial institutions.

Jesse Norman, Financial Secretary to the Treasury and Paymaster General, said:

The UK has always sought to lead in finding an international solution to taxing the digital economy. This targeted and proportionate Digital Services Tax is designed to keep our tax system in this area both fair and competitive, pending a longer term international settlement.

The consultations on the draft legislation will run until 5 September, with measures included in the next Finance Bill. Respondents can contribute here.

For any queries, please speak to your usual PwC contact .