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Britain to consider new tax mechanism for online sales

The British government will consult on a new mechanism for collecting value-added-tax (VAT) for online sales to ensure that the tax paid by consumers reaches the Treasury, Chancellor of the Exchequer Philip Hammond said during his spring statement to Parliament.

Hammond said yesterday the government would launch a “call for evidence” on how online platforms can assist users to pay “the right amount of tax”.

He also said he was still looking at the level of tax paid by the major internet companies.

“In the autumn we published a paper on taxing large digital businesses in the global economy and today we follow up with a publication that explores potential solutions,” Hammond said.

Major digital companies such as Facebook and Google have previously paid little tax in Europe, typically by channelling sales via countries like Ireland and Luxembourg, which have a light touch approach to taxation.

Hammond said he would discuss the issue with G20 Finance Ministers in Buenos Aires later this week.

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