What you need to know about Britain’s "Digital Services Tax"

Philip Hammond the Chancellor

A freeze on Spirits Duty will save 30p on a bottle of Scotch compared to the inflation assumption in the Office for Budget Responsibility's forecast, the Chancellor said.

The measure goes further than most other countries, although it is notable that Spain also proposes to introduce a digital services tax at 3% on digital services income by 2019.

"Any idea that there is a serious desire to eliminate the deficit by the mid 2020s is surely for the birds", IFS director Paul Johnson said.

"The government will abolish the use of PFI and PF2 for future projects putting another legacy of labour behind us".

The move backfired when the Conservatives lost their majority in Parliament, leaving May atop a minority government whose fragility has complicated divorce negotiations with the EU.

"Theresa May promised the people that austerity would end, but this budget has delivered nothing of the sort".

More pragmatically, a United Kingdom tax has been talked about for years already, so this is just the start of how this might develop.

Hammond suggested the tax will begin in April 2020, pending consultation.

Under Mr Hammond's Budget plans the personal allowance, which is the maximum amount someone can earn before paying tax, will rise to £12,500 from £11,850.

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Criticised by Mr Corbyn for choosing a "tax cut for higher earners" rather than ending a benefit freeze, she replied: 'On Monday, he said cutting taxes for 32 million people was frittering money away on ideological tax cuts.

Johnson described the budget as a gamble for Hammond, given the possibility that the public finances could deteriorate next year.

"This week he [Mr Hammond] announced a Brexit dividend budget if we come out of the European Union with no-deal".

"Mr Hammond said it would put "£130 in the pocket of a typical basic rate taxpayer".

The Chancellor set out a five-year plan for departmental spending which will see Whitehall budgets rise by an average of 1.2% a year. He's also signaled he intends to increase National Health Service funding by 20 billion pounds a year by 2023 without raising taxes.

He said detailed departmental allocations would have to wait until the spending review next year by which time the outcome of the Brexit negotiations is expected to have become clear.

"But what the OBR gives the OBR can take away".

Hammond said the Government would continue working with the OECD and G20 to seek a global agreement, and would consider adopting any globally agreed solution in place of the UK Digital Services Tax.

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