The United Kingdom is considering potential changes to its Digital Services Tax (DST) as part of ongoing discussions with the United States to avert a new wave of tariffs. The DST, first proposed back in 2020, is targeted at these same global technology behemoths like Amazon and Meta. It brings in over £800 million annually to the UK coffers. However, amid the threat of additional tariffs announced by former US President Donald Trump, the UK government, led by Chancellor Rachel Reeves, is exploring adjustments to the tax.
The United States is concerned about large trade surplus countries, but the UK isn’t one of those countries. The previous Trump administration shunted some of those retaliatory tariffs to UK goods. They intended to roll out another batch of tariffs on April 2, a day that many have now dubbed “Tariff Day.” Chancellor Reeves brought home the need to keep all trade paths open and recognized the intense talks over the new-fangled DST.
"We've got to get the balance right, and those discussions at the moment are ongoing. We want to make progress. We do not want to see British exporters subject to higher tariffs," stated Rachel Reeves.
The Liberal Democrats have recently spoken out against any possible reduction in the DST. Daisy Cooper, the party's Treasury spokesperson, has called for the tax to be tripled to 6% instead and expressed her concern over the government's current stance.
"Deeply concerned that the government may even be considering reducing the digital services tax," remarked Daisy Cooper.
Chancellor Reeves welcomed the UK’s longstanding commitment to free and open trade. He joined the chorus in stating that businesses working in the UK should step up and pay their fair share of taxes.
"Right thing that companies who operate in the UK pay their taxes in the UK, and the US government and tech companies understand as well, but we are having discussions with the US at the moment. I want to preserve free and open trade."