Today’s Budget (29 October 2018) has featured extra cash for fixing potholes, money allocated to business rate relief and the high street and now a ‘UK Digital Services Tax’.
The tax will be paid by profitable firms that have at least £500m a year in global revenues and is expected to come into effect in April 2020, following a consultation.
Will the globe’s largest online bicycle retailer be impacted by the tax? Since Germany’s Bike24 was acquired by Wiggle Chain Reaction last year, the company is believed to have a global turnover in excess of £500 million, meaning it will potentially be hit by the new tax.
The Chancellor said that it wasn’t a tax on goods bought online. It is expected to raise more than £400 million a year.
We’ll update this story when the full details of the new tax emerge.
UPDATE: The Treasury has confirmed that it will be a 2% tax on revenues earned which are linked to UK users, which will likely put Wiggle-CRC out of the frame. Confusingly, that does seem to, however, contradict the Chancellor’s speech which referred to global turnovers in excess of £500m.