TechnologyBrown told to ponder ebusiness tax question

Brown told to ponder ebusiness tax question

The Tories have told chancellor Gordon Brown to keep the threat posed to government revenue by e-business 'very seriously in mind'.

Conservative party financial spokesman David Lidington said the Treasury would have to move on from the days of taxing tangible goods made in fixed locations.

He said risks to revenue could arise from trade in intangible digital products and services, with the problem being of establishing whether a transaction had taken place and, if so, where and when it had occured.

A further threat to corporation tax revenues could come from the mobility of virtual businesses in terms of real spacial location, if and when they start declaring substantial taxable profits, Lidington warned.

He adding: ‘One is not at a stage of panic, but there are some very interesting and important questions to be raised.’

The Aylesbury MP spoke out after receiving replies to a series of questions he raised in the Commons.

Ministers claimed the impact of e-commerce on corporate residence poses no immediate short-term threat to tax revenues.

Paymaster general Dawn Primarolo admitted, however, that UK authorities are engaged in discussions with the Organisation for Economic Co-operation and Development and business ‘on this and related e-commerce issues’.

Lidington also asked if digitisation itself posed a risk to future revenue. Earlier Treasury financial secretary Paul Boateng said Customs did not believe it did.

The Chancellor has already had to change taxation on betting to halt a growing loss of revenue as firms moved offshore to avoid paying it.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

7d Martin Herron, MHA MacIntyre Hudson
Cybersecurity webinar: how protected are you and your data?

Security Cybersecurity webinar: how protected are you and your data?

2w Emma Smith, Managing Editor
Back to the Future: why financial transformation just hasn’t happened

Technology Back to the Future: why financial transformation just hasn’t happened

2w Workday | Sponsored
GDPR: Don’t forget the human touch

Security GDPR: Don’t forget the human touch

3w Neil Patrick, Director of GRC and Centre of Excellence EMEA for SAP
5 key tech innovations helping accountants transform their businesses

Accounting Software 5 key tech innovations helping accountants transform their businesses

3w Heather Darnell, Founder of Ask the BOSS
HMRC scaling back digital projects to ‘release project capability to EU Exit work’

Brexit HMRC scaling back digital projects to ‘release project capability to EU Exit work’

4w Alia Shoaib, Reporter
What is the role of governance, compliance, and control in financial transformation?

Corporate Governance What is the role of governance, compliance, and control in financial transformation?

1m Workday | Sponsored
Grant Thornton joins with Immersive Labs to increase cyber talent

Career Grant Thornton joins with Immersive Labs to increase cyber talent

2m Lucy Skoulding, Reporter