Digital Services Tax


From April 2020, the government will introduce a new 2% tax on the revenues of certain digital businesses which derive value from their UK users. The tax will:

* apply to revenues generated from the provision of the following business activities: search engines, social media platforms and online marketplaces;
* apply to revenues from those activities that are linked to the participation of UK users, subject to a £25m per annum allowance;
* only apply to groups that generate global revenues from in-scope business activities in excess of £500m per annum; and
* include a safe harbour provision that exempts loss-makers and reduces the effective rate of tax on businesses with very low profit margins.

The government will consult on the detailed design of the Digital Services Tax and legislate in Finance Bill 2019/20.

Retail Gift Aid reducing the frequency of letters to donors
The government will introduce a change to the Retail Gift Aid scheme from April 2019, relaxing the requirement to issue letters annually to donors. Charities will be able to choose to issue letters once every 3 years rather than every year, where a donor’s total donations in a tax year are worth less than £20.

Increases to charities' small trading exemption limits
The small trading tax exemption limits for charities that apply to trading that does not relate to a charity's primary purpose, are to be increased from April 2019. The new limits will be as follows:

* annual charity income under £32,000: maximum non-primary purpose trading is £8,000
* annual charity income between £32,000 and £320,000: maximum non-primary purpose trading is 25% of income
* annual charity income over £320,000: maximum non-primary purpose trading is £80,000.

Added By: Sue Taylor on 01st Nov 2018 - 14:00
Last Updated: 01st Nov 2018 - 20:12

Number of Views: 441
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