IT buying group Network Group has welcomed the Government’s plans for a ‘Google Tax’.
Chancellor of the Exchequer George Osborne first announced plans for the ‘Google Tax’ in his Autumn Statement last week, which will see the Government clamp down on tax avoidance by multinational companies.
The tax will be implemented in April 2015, and members from Network Group are pleased by the news.
Phylip Morgan, managing director at Network Group, said: “We welcome the moves that George Osborne has made to block the ways that many of these companies are exploiting opportunity by charging management and royalty fees, as a means to transfer profits outside of the UK and thus avoid UK tax.”
However, Craig Hume, retail director at Network Group, is sceptical about how the Government will implement the changes. “We have these huge multinational companies operating in our country and they are not fully supporting our economy," he said.
“While I am all for them paying their fair share of tax, I find it difficult to see how Osborne could actually implement his proposal while remaining inside either or both the current EU rules on corporate taxation and the double taxation treaties.”
Osborne also promised to cut and cap business rates for UK High Streets, which Network Group feels will benefit many retailers.
Morgan explained: “High Street retailers provide a brilliant local business service to communities and more support must be given to them against the online giants that continue to ‘remove value’ from products and services by selling at reduced prices.”
Hume continued: “Retail has changed dramatically in recent years and if we want to encourage more people to shop local rather than buy online, we need to reduce the tax on small to medium sized businesses who want to trade on our High Streets.”
Only time will tell to see if the new tax scheme and business rates will truly benefit the UK’s High Streets.