Digital Services Tax
The question
To ask the Chancellor of the Exchequer, what consideration has been given to the potential merits of increasing the existing 2% rate of the Digital Services Tax.
Answered by Dan Tomlinson
The Digital Services Tax (DST) is a 2 per cent tax to ensure that providers of search engines, social media platforms, and online marketplaces pay UK tax on digital services that reflects the value they derive from UK user-related activities. The DST raised around £800 million of revenues in the financial year 2024-25 in support of vital public services.
DST was introduced as an interim solution to the challenges posed by the digitalisation of the economy to the international corporate tax framework. The UK remains committed to withdrawing DST once a suitable global solution to these challenges is established.
The Government keeps all aspects of the tax system under review. Any potential tax changes would need to be considered carefully as part of the wider Budget process, with decisions taken by the Chancellor at a fiscal event.
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