17
Accepted
HMRC and HM Treasury said that they have not seen any evidence of tax avoidance...
Conclusion
HMRC and HM Treasury said that they have not seen any evidence of tax avoidance so far, for example by changing business models, as businesses have not regarded it as worth their while. But they assured us that they are aware of the risks and that anomalies would be investigated.54 Neither has HMRC found any evidence of tax evasion, which it told us is not unexpected given the profile of the major players in this type of business.55 Crypto assets are within scope for the Digital Services Tax. They are a rapidly developing area with little regulation. HMRC told us that it is one of the first tax authorities to produce comprehensive guidance on crypto assets and that the multilateral nature of Pillars One and Two will make compliance work on crypto transactions more straightforward.56
Government Response Summary
The government agrees and is committed to implementing Pillar One while monitoring Digital Services Tax. HMRC is enhancing its plans to identify groups within DST scope, increase business awareness, and address risks from non-UK presence, with these plans due for completion by the end of 2023.
Government Response
Accepted
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: end 2023 5.2 The government is committed to implementing Amount A of Pillar One and repealing DST. Ahead of the implementation of Pillar One, the government will continue to monitor DST as part of usual policy maintenance. 5.3 HMRC has a dedicated DST compliance team working collaboratively with groups to understand their relevant online services and methodologies to identify ‘UK Users’. Where HMRC disagrees with a group’s position, appropriate compliance activity is undertaken. This will continue to be undertaken if DST is in force longer than anticipated. 5.4 HMRC is enhancing its plans for identifying groups potentially within scope of DST, increasing awareness of DST amongst businesses and addressing the risks posed by groups without a physical presence in the UK that may not regularly engage with HMRC. These plans seek to address the risk of future non-cooperation with the regime and are due to be completed in 2023.
Source
Committee
Public Accounts Committee
Inquiry
Digital Services Tax
Report
Forty-Fourth Report - The Digital Services Tax
05 Apr 2023
HC 732
Addressee Bodies
HM Treasury
Timeline
Recommendation age
3.3 yrs
Report published
05 Apr 2023