Technology featured heavily in Chancellor Philip Hammond’s Spring Statement, covering everything from taxing multinational conglomerates to a fresh push for faster broadband.
Using his latest statement to pretty much reiterate what he said in Autumn, Hammond called for a deeper look at how tech giants such as Google and Facebook are taxed. He said there was a need to reform how the bigger tech companies are taxed, suggesting that revenues, rather than profits, should be taxed.
Hammond also announced that he wanted to take a greater look into online marketplaces such as eBay. While the Chancellor said that the likes of eBay were good for the UK economy and good for consumers he said that the way tax was paid on these transactions needs to be reviewed, adding that some sellers get around paying VAT on their sales. He said: “Some people who earn money from using these platforms may never have earned money without an employer to act as an intermediary between them and HMRC before, and can find it difficult to understand and meet their tax obligations."
Hammond said that all the tax reviews were being put into place in order to protect start-ups and growing companies. He said the current system benefits the companies at the top and hinders companies starting up. As a result he said that any tax reforms would protect start-ups. "The current misalignment between where digital businesses are taxed and where they create value threatens to undermine the fairness, sustainability and public acceptability of the corporate tax system," he said.
Aside from tax reforms, Hammond also revealed that £95 million had been set aside to boost the country’s fibre broadband. In total, 13 different areas across the country will share the money designed to ensure home and business access to broadband connections is made faster and more reliable. Manchester is receiving the biggest slice of the cash, with £22.3 million going into the North West city’s infrastructure. Other successful bidders included projects in London and Belfast, with a number of hospitals, schools and emergency services among those who will benefit from the funding. It is the first part of the £190 million Challenge Fund announced last Autumn to be distributed.
The government also used the Spring Statement to assert its commitment to 5G, with £25 million worth of funding being set aside for 5G testbeds.