2% tax will apply on the revenues of specific digital business models.
To try and ensure that digital businesses pay tax that reflects the value they derive from UK users, the government has announced that it will introduce a Digital Services Tax (DST) which will raise £1.5bn over four years from April 2020
The DST applies a 2% tax on the revenues of specific digital business models where their revenues are linked the participation of UK users. The tax will apply to:
social media platforms
The above have been chosen as the government considers these business models derive significant value from the participation of their users.
Note however that the DST is not a tax on online sales of goods – as a result it will only apply to revenues earnt from intermediating such sales, not from making the online sale.