Britain could “go it alone” with a new scheme designed to tackle tax avoidance by Amazon and other digital global giants.
Chancellor Philip Hammond told the Conservative party conference that the global internet giants had to pay their way and contribute to public services.
He added: “The best way to tax international companies is through international agreements but the time for talking is coming to an end and the stalling has to stop… If we cannot reach agreement, the UK will go it alone with a digital services tax of its own.”
Hammond hinted earlier this year that a so-called “Amazon tax” could be introduced, even if the UK had to proceed with plans independently.
His plans were criticised by the likes of John Lewis Partnership chairman Sir Charlie Mayfield, who said that a business rates review was needed and that a tax on digital retailers would not solve the high street’s problems.
The government has recently appointed former Obama adviser Jason Furman to lead a review into the power held by technology giants including Amazon, Google and Facebook.
Hammond also told the conference that the apprenticeship levy would be reviewed and made more flexible. Businesses have found the levy cumbersome and restrictive and, in some cases, it has placed strain on already tight finances.
He said: “We listen to business and we have heard concerns on the apprenticeship levy. Today I am setting out a series of measures to allow firms more flexibility in how the apprenticeship levy is spent.”
The new proposals will allow large employers to transfer up to 25% of their apprenticeship levy funds to businesses in their supply chain from April 2019. Hammond added that the government was committing £30m to the initiative.
BRC chief executive Helen Dickinson responded to Hammond’s assertions. She said: “The chancellor’s pledge to “Back Business” is welcome but the retail industry needs to see action. We require a commitment that the Treasury will reduce the overall business rates burden immediately.
“We note the chancellor’s intention to levy some form of services tax on internet companies and we are pleased he hasn’t been tempted to propose an online sales tax which would be an additional burden on retailers many of whom have online as well as physical stores.”
On the apprenticeship levy, she said: “For the retail industry to fully engage, we would like to see the Government go further by providing greater flexibility in how apprenticeship levy funds can be spent so that retailers can equip colleagues with the skills needed for the future.
“Until we see further reform the levy remains another tax on an embattled industry.”