UK Government Denies 'Google' Tax Claims

by Jason Gorringe, Tax-News.com, London

08 May 2009

The UK government has denied claims that it plans to impose new taxes on internet usage as a means to raise money for broadband expansion and the funding of public service broadcasting.

A spokesperson from Digital Britain, a government project which is aiming to drive forward the development of the country's digital communications, told the Internet Advertising Bureau that “no plans” are in the works for “any new taxes” to fund new or existing digital communications projects.

The government denial came in response to recent reports that it was examining a range of new ways to raise additional money for digital investment. These options include a ‘click tax’ on companies which earn substantial revenues from online advertising, notably Google, and taxes on Internet Service Providers based on their customers’ usage.

The government has already earmarked an estimated GBP250m in surplus money from the BBC’s ‘digital switchover’ budget to provide universal broadband coverage throughout the UK.

It is the government's intention to ensure every household in the UK has broadband access by 2012, and it is thought that revenues from the new tax could be used in support of this objective. But it is also understood that these revenues could support public service broadcasters like Channel 4, which is facing an annual funding shortfall of GBP150m.

New funding proposals may be contained in the full Digital Britain report, due to be published in June. The Interim report, published earlier this year, mooted the introduction of a GBP20 levy on broadband users, although it suggested that this money be used to fight digital piracy.

Recommended