back to article UK should set its own tax on tech giants if international deal isn't reached – Chancellor

The UK Chancellor of the Exchequer Philip Hammond has blamed US tax reforms for slow progress towards an international levy on tech giants' revenues, and warned that the UK is considering going it alone. The Organisation for Economic Co-operation and Development (OECD) is working on a global agreement that would ensure that …

  1. SVV Silver badge

    A thought experiment

    Imagine if he imposed this, and (for example) Facebook and Twitter closed down their services for UK users "until the tax was repealed". How massive would the unrest and protest be in the country as millions of addicts demanded their social media fix back immediately? How quickly would he back down?

    Answers on a postcard please.

    1. djstardust Silver badge

      Re: A thought experiment

      If Facebook disappeared tomorrow it would actually solve a whole raft of social problems in this country.

      It seems in some areas that Facebook just fuels anger in families and relationships. Just watch Jeremy Kyle and you'll see what I mean.

      Apart from that, if it got switched off after a month nobody would even notice any more. Out of my 90 or so "friends" probably 7 or 8 are serial posters, maybe 20 or so occasionally and the rest just stalk other people. Facebook is dying a natural death anyway.

      Societal changes happen all the time. We don't all wear hats any more or smoke pipes. Nobody has a Nokia N95. Life moves on.

      1. Anonymous Coward
        Anonymous Coward

        Re: A thought experiment

        "Just watch Jeremy Kyle and you'll see what I mean."

        No, I won't. (Watch it, that is. I already see what you mean)

      2. LucreLout Silver badge

        Re: A thought experiment

        If Facebook disappeared tomorrow it would actually solve a whole raft of social problems in this country.

        Indeed. Quite why social media isn't "sin taxed" in the way anything else is I cannot fathom. Much of Big Tobacco is beyond our tax jurisdiction because while they operate here, their HQs are abroad... so similar to social meeja nonesense to. What we do instead is tax the purchase/consumption of the product, so packet filtering out farcebook etc unless the consumer (phone/broadband connection) has paid the relevant tax upfront should be simple.

        It'd reduce the societal harm this nonsense causes and exacerbates, and would raise a pretty penny for the Treasury too, as most addicts would simply cough up, because, well, they're addicts.

        1. Teiwaz Silver badge

          Re: A thought experiment

          For everything. there's a Python Sketch

          https://www.youtube.com/watch?v=eDdnI87xLVY

          1. Lars Silver badge
            Happy

            Re: A thought experiment

            "For everything. there's a Python Sketch".

            A slight but very sad correction, it's not "there is" but "there was". And how you would need them now.

            Still they were able to foresee both the frogs, moggs and borises of today. What they could have made out of them. Some have apparently taken some time off and one has escaped across the pond, well fed and slightly embarrassed about the old country, sad.

      3. Snow Hill Island

        Re: A thought experiment

        "Facebook is dying a natural death anyway."

        Clearly you're not in a circle of parents with school aged children. The kids all communicate with apps other than facebook, but the parents still use facebook to find out whether their little darlings have forgotten about the latest bit of history homework, or whether the teacher really hasn't set any this term...

        1. Anonymous Coward
          Anonymous Coward

          Re: A thought experiment

          "Clearly you're not in a circle of parents with school aged children"

          I'm not ... but I play in a local amatuer orchestra. Next week the cello section are getting together for a practice and person organising took mobile numbers to text us the details ... however the text I got was "Do you use whatsapp as I've set up a whatsapp group for us" .... got a terse reply from me that I don't use any facebook apps!

        2. tony
          Happy

          Re: A thought experiment

          "Clearly you're not in a circle of parents with school aged children."

          I think that proves the OP's point, when these school aged children eventually have school aged children they'll communicate via Whatsapp, Chime, Gato... whilst their kids are finding something their parents don't understand.

      4. Lars Silver badge
        Happy

        Re: A thought experiment

        @ djstardust

        I very much agree, but I have to add that I use a Nokia N90 and I have a working Communicator too.

        Did Hammond have any views about the tax heavens.

      5. Doctor Syntax Silver badge

        Re: A thought experiment

        "Just watch Jeremy Kyle"

        I'd rather not, thanks all the same.

      6. BongoJoe Silver badge

        Re: A thought experiment

        If Facebook disappeared tomorrow it would actually solve a whole raft of social problems in this country.

        I can see two things happening if Facebook and the rest vanished.

        First, new phones wouldn't have a camera setting, "Food Mode".

        Second, fewer knobs with selfie-sticks rouming around unsupervised.

        Neither, it seems to be, would be a bad thing

        1. msknight Silver badge

          Re: A thought experiment

          If Facebook, etc. stopped overnight, the others would step in to fill the gap. It wouldn't take much. There are already plenty of other platforms out there. There'd be a bit of wailing and gnashing of teeth, but, hey ho.

          I left one post on Facebook, to let people know why I'd left. I went back to check, and that post had been deleted... but not by me. Also, if you try and browse my facebook page, you'll see a facebook error. However, to me, it looks like all is fine and dandy.

          Also... I spent some time repeatedly going through my history, deleting all the posts. Returning to check, some months later, one of those old posts had reappeared. Funny that. Also, you can't block Zuckerberg.

          You know real friends... who you can not talk with for years and when you do, it seems like it was only yesterday that you were chatting over tea and cake... well, Facebook doesn't value those friendships. If you don't interact with someone on a regular basis, it drops them from your feed.

          And there's more where that came from.

          Facebook is a poisoned, feel-good chalice that is doing us no good. I found myself facing posts simultaneously from friends, one whose cat had just died, and another was celebrating an exam win. I found myself unable to empathise with them both simultaneously... and ended up putting on some kind of emotional mask so I could chat with them... and it felt dishonest.

          The sooner Facebook dies... the better... IMHO.

    2. LucreLout Silver badge

      Re: A thought experiment

      How massive would the unrest and protest be in the country as millions of addicts demanded their social media fix back immediately? How quickly would he back down?

      That'd depend on implementation. A simple £1 per week fee (tax) to have your phone provider allow through farcebook traffic would be a no-brainer for the addicts, and an effective tax on their operations here. Arguably its the easiest tax to implement because most of the plebs lack the skills or knowledge to avoid it.

      An actual tax on their efforts can't be applied unilaterally at corporation level and Eyore well knows it. He's grandstanding to look as though he's doing something rather than actually doing something.

    3. Anonymous Coward
      Anonymous Coward

      Re: A thought experiment

      "How massive would the unrest and protest be in the country as millions of addicts demanded their social media fix back immediately?"

      I'm sure that MySpace would enjoy a comfortable revival to host "online protests".

      I'm also sure that after teaching people for years to sit on their couch rather than go out to meet each other, they wouldn't immediately remember how it's done.

    4. Teiwaz Silver badge

      Re: A thought experiment

      Answers on a postcard please.

      Answers on either blood splattered on the pavement below any (and most) tall buildings or on bullet holes on convenient walls I think more likely....

      I know too many aquaintences who certainly can't seem to get through a single day without at least one status update, a fair few more who certainly have a weekly social habit (X is at X event or nightspot types).

      I think all of us not dedicated enough not to still have even a disused FB account know people in either camp.

    5. Wolfclaw Silver badge

      Re: A thought experiment

      Don't you mean answers in a point-2-point encrypted IM, that doens't have a tech company snooping on it and inserting adverts ?

    6. Anonymous Coward
      Anonymous Coward

      Re: Close Down FaceBook and Twitter?

      Please can you do this today, not tomorrow but right now.

      Getting rid of these two [redacted] things would increase productivity nationwide. Add Google and Instagram and Pinterest and it will be 'Job Done'.

      If someone does not tackle them then the NHS will be on the hook for a lot of bad neck issues in the near future. All those poor sods walking along the street with hunched shoulders and necks bent to look down into their phones is a disaster waiting to happen. Bad posture? You betcha but I've got to take this selfie!.

    7. Doctor Syntax Silver badge

      Re: A thought experiment

      "How massive would the unrest and protest be in the country as millions of addicts demanded their social media fix back immediately?"

      They'd take to Twitter in their droves to protest.

    8. Zippy´s Sausage Factory

      Re: A thought experiment

      I'm going for 24 hours.

      /me opens popcorn and sits back...

      1. msknight Silver badge

        Re: A thought experiment

        Thinking about this, if an organisation used an arm outside the UK to place the advertising business with Faceache... adverts would still be seen by UK users, and there wouldn't be any transaction generated in the UK to be taxed in the first place.

        The only losers would be UK businesses which weren't big enough to have offices in other countries. They'd probably end up paying more to cover the tax.

  2. Rob Fisher

    What kind of conservatives want to tax everything?

    Seems a strange sort of conservative who wants to invent new taxes to punish successful businesses. Perhaps he thinks Corbyn supporters are suddenly going to vote for him now. I would like someone to vote for who is in favour of lower taxes and fewer regulations.

    1. Spazturtle Silver badge

      Re: What kind of conservatives want to tax everything?

      If a company doesn't pay tax in your country of have any staff in your country then why would you want to allow them to continue operating in your country?

      1. Rob Fisher

        Re: What kind of conservatives want to tax everything?

        Why not? If a company does not employ your wife and does not send you free stuff, why would you want to buy groceries from them? It's division of labour: saves you having to spend all your time growing vegetables.

        1. Spazturtle Silver badge

          Re: What kind of conservatives want to tax everything?

          "Why not? If a company does not employ your wife and does not send you free stuff, why would you want to buy groceries from them? It's division of labour: saves you having to spend all your time growing vegetables."

          But you are not getting anything of value from them, facebook do not provide a service that contributes to the economy.

          If a company is a net drain on the economy then why should it be allowed to continue operating?

          1. codejunky Silver badge

            Re: What kind of conservatives want to tax everything?

            @ Spazturtle

            "But you are not getting anything of value from them, facebook do not provide a service that contributes to the economy."

            Really? People getting a service they want and it is not dependent on income either. A service available to all which allows instant communication around the world rich or poor, young or old. Providing entertainment without a monetary price tag. It does contribute to the economy even if old methods of measuring economic activity are not able to correctly evaluate 'free'.

            "If a company is a net drain on the economy then why should it be allowed to continue operating?"

            Why is it allowed? Who's permission do the people need to be able to access the free service they want? Who should dictate what contributes to peoples lives and how much and what should be removed for the 'greater good'?

            If we are removing drains on the economy then that is a large part of the public sector removed. Do we apply that to private individuals and over what time scale (think welfare, public pensions, life support).

            There is a reason we dont have such a dictatorship. Because it would evaluate cost/benefit wrong and economic information is too slow and imprecise to do so.

            1. Doctor Syntax Silver badge

              Re: What kind of conservatives want to tax everything?

              "Providing entertainment without a monetary price tag."

              Without a monetary price tag maybe. But I refer you back to your previous comment about not being stolen from. How about users having their privacy stolen. And even if the users accept this, how about those who are non-account holders having their privacy stolen by way of shadow profiles?

              1. codejunky Silver badge

                Re: What kind of conservatives want to tax everything?

                @ Doctor Syntax

                "But I refer you back to your previous comment about not being stolen from. How about users having their privacy stolen."

                They are not. To steal is to deprive someone of what they have by taking it without permission. Having a copy of it is grey area, having a copy given to you is not stealing. People are willingly handing over data. It is not being stolen, it is not being taken nor coerced. People are signing up to this (of their own free will) and giving them data they do not consider important enough to keep private.

                "And even if the users accept this, how about those who are non-account holders having their privacy stolen by way of shadow profiles?"

                Then I suggests you get some door kickers to assist you in breaking into people homes all over the country and even world to recover any photographs which may potentially have you or your property in the background. Also anyone who hears or sees you could potentially mention you to someone else! And so on.

                Aka no.

          2. Muppet Boss

            Re: What kind of conservatives want to tax everything?

            >If a company is a net drain on the economy then why should it be allowed to continue operating?

            Good idea if extended to governments

      2. Rupert Fiennes Bronze badge

        Re: What kind of conservatives want to tax everything?

        Err, because they are (until next March) entitled to incorporate in any EU country and pay their taxes there?

        1. Yet Another Anonymous coward Silver badge

          Re: What kind of conservatives want to tax everything?

          But come next March when Britain once again rules the waves it will be able to dictate whatever trade deals it wants to Trump.

          If America wants access to our Dutchy Original Shortbread it will bow down to our tariff demands on Facebook

          1. Rich 11 Silver badge

            Re: What kind of conservatives want to tax everything?

            If America wants access to our Dutchy Original Shortbread it will bow down to our tariff demands on Facebook

            Jam today and jam tomorrow. Jam manufacturers, unite and seize the future with your sticky grip!

            1. Youngone Silver badge

              Re: What kind of conservatives want to tax everything?

              Jam today and jam tomorrow.

              They treat me like yesterday's jam.

    2. Rich 11 Silver badge

      Re: What kind of conservatives want to tax everything?

      I would like someone to vote for who is in favour of lower taxes and fewer regulations.

      And I would like someone to vote for who is not going to offer yet more monetary bribes, but who would restore the necessary degree of taxes which have been cut over the last three decades so that we can once again properly fund healthcare and schools and even (and I never thought I would ever say this) the police, and who will step back from kicking the economy in the bollocks by abandoning the irresolvable stupidity of Brexit.

      1. Rob Fisher

        Re: What kind of conservatives want to tax everything?

        "restore the necessary degree of taxes"

        Ah, you youngsters! I remember when VAT was 15%!

        1. Anonymous Coward
          Anonymous Coward

          Re: What kind of conservatives want to tax everything?

          But 15% was seen as a punitive rise imposed by Geoffrey Howe in the incoming Thatcher government in 1979 when teh previous rates were 8% basic and 12.5% luxury rates.

          Anyway, I rememebr when VAT was first introduced at 10% - was a requirement to replace the previous purchase tax regime when UK joined the EEC. Maybe we can get purchase tax back!

      2. LucreLout Silver badge

        Re: What kind of conservatives want to tax everything?

        And I would like someone to vote for who is not going to offer yet more monetary bribes, but who would restore the necessary degree of taxes which have been cut over the last three decades so that we can once again properly fund healthcare and schools

        The central problem with that thesis, is that the tax take is already at an all time high [1][2]. There's simply no more revenue to get - we're way past the laffer curve now and the only way to increase the tax take from here is to cut taxes rather than raise them.

        It's basic economics, and frankly anyone that can't plot this for themselves on a bit of graph paper does not belong in a polling booth. I expect the usual economically illiterate downvoters to appear enmasse, but facts are facts.

        Lucre Louts Law: While you can, and should, form an opinion from facts, you cannot form a fact from your opinion.

        1 - https://www.ukpublicrevenue.co.uk/past_revenue

        2 - https://www.statista.com/statistics/284306/united-kingdom-hmrc-tax-receipts-income-tax/

        1. Duffy Moon

          Re: What kind of conservatives want to tax everything?

          "It's basic economics, and frankly anyone that can't plot this for themselves on a bit of graph paper does not belong in a polling booth. I expect the usual economically illiterate downvoters to appear enmasse, but facts are facts."

          The trouble with economics, basic or otherwise, is that it's 10% mathematics, 10% politics and 80% guesswork. Facts may well be facts, but predicting what will happen with a tweak here or there, is too complex to model with any degree of accuracy.

          1. LucreLout Silver badge

            Re: What kind of conservatives want to tax everything?

            The trouble with economics, basic or otherwise, is that it's 10% mathematics, 10% politics and 80% guesswork. Facts may well be facts, but predicting what will happen with a tweak here or there, is too complex to model with any degree of accuracy.

            While that makes an entertaining soundbite, that's all it is.

            The fact is that as a percentage of GDP and as an absolute amount of money, taxes have almost never been higher than now.

            Again, facts people - use them to inform your opinions, not your emotions, which you should be keeping to yourselves far more than is apparent.

      3. codejunky Silver badge

        Re: What kind of conservatives want to tax everything?

        @ Rich 11

        "And I would like someone to vote for who is not going to offer yet more monetary bribes, but who would restore the necessary degree of taxes which have been cut over the last three decades so that we can once again properly fund healthcare and schools"

        Oxymoron. You dont want someone to bribe your vote by promising not to steal more from you, but for someone to bribe you by promising to steal for you.

        I would prefer no bribe but not to be stolen from. And I extend that believe beyond myself to everyone in this country.

      4. Anonymous Coward
        Anonymous Coward

        Re: What kind of conservatives want to tax everything?

        but who would restore the necessary degree of taxes which have been cut over the last three decades

        Except that they haven't. Currently, tax burden makes up 34% of UK Gross Domestic Product (GDP), totalling around £724.9bn.

        This is the highest the UK tax burden has been since since 1969-70, when it was 35% of GDP.

    3. codejunky Silver badge

      Re: What kind of conservatives want to tax everything?

      @ Rob Fisher

      "Seems a strange sort of conservative who wants to invent new taxes to punish successful businesses"

      Unfortunately Cameron is little more than a Blair clone and when labour turned extreme socialist the tories moved left to hoover up those voters. They have left a void on the right which means more stealing from you for your own good and penalising success.

      I came here to point out- "pay their fair share of tax" fair is not a number. Who gets to dictate fair and can there be fair with such hatred for law abiding companies providing what people choose to use?

      1. Doctor Syntax Silver badge

        Re: What kind of conservatives want to tax everything?

        "Who gets to dictate fair..."

        The Chancellor of the Exchequer pro tem.

      2. Rich 11 Silver badge

        Re: What kind of conservatives want to tax everything?

        @codejunky:

        If you truly believe that paying taxes is equivalent to having money stolen from you, then I have to ask you where do you think the funding for building roads and bridges comes from? Is the bank willing to fund you and your neighbours to build the stretch outside your row of houses? What are you going to do about the self-centred libertarian next door, who refuses to join in with the collective effort? What are you going to do about the family on the other side, whose breadwinners have just lost their jobs? And if you can get the road built, are you willing to pay a toll every time you drive on the road or walk along the pavement, to pay off that debt and all the interest? Don't you think that there might just be a better way?

        1. codejunky Silver badge

          Re: What kind of conservatives want to tax everything?

          @ Rich 11

          "If you truly believe that paying taxes is equivalent to having money stolen from you, then I have to ask you where do you think the funding for building roads and bridges comes from?"

          I have to wonder how you can write that sentence without seeing the problem. Tax being money stolen from you is the method of extracting the money by force from the person. Saying it is not to be counted as stolen because some of that money is then spent on you is just wrong.

          Think it through- your friend takes money from you under threat of force. They then pocket some of it and then buy you something out of what is left. I would perceive that as theft. How do you see that?

          "funding for building roads and bridges"

          Now to address this bit. Spending all they have by the end of their budget (on anything) to justify getting that amount or more next time. The millennium dome. A bloated public sector. National defence with over expensive but under-performing kit. Monuments to the sky instead of electricity power generation. And so on.

          "Don't you think that there might just be a better way?"

          Yes. Put the state on a diet. Instead of demanding the government fixed every problem and the 'something must be done' mentality, strip the gov and its dependants down to doing just what they are needed for. I am sure you would have handed your friend some money if it was a collective agreed effort for you all for all your benefit. Instead of for him to stuff some in his pocket.

        2. LucreLout Silver badge

          Re: What kind of conservatives want to tax everything?

          If you truly believe that paying taxes is equivalent to having money stolen from you, then I have to ask you where do you think the funding for building roads and bridges comes from?

          The roads and bridges I'm fine to pay tax for, lets round up and call that about 2% of taxes raised. The diversity co-ordinators, middle management, solid gold public sector pensions, and the several armies of administrators, not so much. The vast majority of taxes paid are simply wasted by the state doing work that nobody in the real world would recognise as such, and achieving little or nothing in return.

          The productivity gap, if we ignore the adverse impact of millennials, has largely come about because taxes are so high, and the state achieves less value per pound spent than private enterprise; a very important fact when considering the state spends about 40% of GDP according to itself. The governments own numbers indicate they achieve just 70p of value per £1 spent, and thats totally ignoring the fact that what they perceive to be value has little to no impact upon the real world - its just internal reports and administration. The private sector is running around 90p per £1.

          https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/ukproductivityintroduction/jantomar2017

          https://www.ons.gov.uk/economy/economicoutputandproductivity/publicservicesproductivity/datasets/growthratesandindicesfortotalpublicserviceoutputinputsandproductivitytable1

          https://www.gov.uk/government/publications/delivering-better-outcomes-for-citizens-practical-steps-for-unlocking-public-value

    4. This post has been deleted by its author

    5. Tom 35 Silver badge

      Re: What kind of conservatives want to tax everything?

      It's working great for Trump... right?

  3. Version 1.0 Silver badge

    Promises are cheap ...

    ... but the Conservative Party is even cheaper - they will just add this to their long list of promises that are quietly dropped when nobody is looking. And someone in the Party will get a board position at Facebook.

    1. Dweeb Coder

      Re: Promises are cheap ...

      Am I the only one who finds the Tory lower tax claim to be totally bogus, the extra money in my wage was quickly spent on assisting my children with affordable housing, funding changes to my mother house which the local council can no longer afford to support her age related disability, and constantly replacing tyres due to the poor conditions of our roads. Low tax my arse.

  4. Scott Broukell
    Meh

    Win win win with new technologies!

    Or how about, for a small negotiated slice of the action, HMRC team up with FB and they seamlessly collect import/export duties across the EU border on our behalf! That way FB would be on a nice little earner that would go some way to offset the taxation levied on their own UK business! Plus, any non-payers, could find fwends and family getting a knock at the door to cough up whats due! /S

    1. Version 1.0 Silver badge

      Re: Win win win with new technologies!

      Let's tax electrons ... this should be as easy as no border in Ireland, a simple technological solution ... gotta luv em.

      1. LucreLout Silver badge

        Re: Win win win with new technologies!

        this should be as easy as no border in Ireland

        Yes, it'd have been a huge help if both sides had been honest that the minute we voted to leave, there was always going to have to be a land border between the republic and NI. The only way it could be different is if Ireland leaves too. Anything else is just a fudge.

  5. Anonymous Coward
    Anonymous Coward

    "UK should set its own tax on tech giants"

    Yvette, get out the wet lettuce!

  6. Anonymous Coward
    Anonymous Coward

    but ....

    Given the issue is companies moving their revenue to low tax environments by contracting there, a UK based revenue tax will ... not work.

    Just as the diverted profits tax didn't work because the profits were declared elsewhere on revenue declared elsewhere.

  7. geekguy

    Perhaps the chancellor should start by learning what tax should be paid by people and not the persecution of small contractors as he seems intent on.

    This chancellor has no basic understanding at all, its quite frightening.

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