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Investigation into the Digital Services Tax

In April 2020 HM Revenue & Customs (HMRC) introduced the Digital Services Tax, a 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users. The government expects to remove this tax when international reforms proposed by the Organisation for Economic Co-operation and Development (OECD) are agreed and passed into law. 

This investigation will consider HMRC’s design, implementation and administration of the Digital Services Tax and its readiness to replace it with the OECD reforms. It will set out: 

  • What the Digital Services Tax is and why it was introduced  
  • How HMRC managed risks when implementing the Digital Services Tax 
  • The lessons HMRC has learned from implementing the Digital Services Tax and how it intends to use them in implementing OECD reforms. 

If you would like to provide evidence for our study please email the study team on enquiries@nao.org.uk, putting the study title in the subject line. The team will consider the evidence you provide; however, please note that due to the volume of information we receive we may not respond to you directly.