Investigation into the Digital Services Tax

a) HMRC should set out criteria to ensure its teams are able to consistently identify all business groups, companies and sources of revenue that are in scope for the Digital Services Tax. This could include updating guidance to DST Compliance teams to specify when, or in what circumstances, they should: ? escalate a case to additional levels of scrutiny; and ? triangulate data supporting an individual group?s tax return with other information, including the group?s contracts with other companies, management information and (where necessary) the group?s data on UK internet traffic to help understand completeness, and potentially identify additional revenue streams within groups

b) HMRC should estimate the potential tax gap for DST (the difference between total theoretical tax liabilities and the amount that has been paid) separate from any HMRC calculation of the overall tax gap. For example, by comparing total revenue with macro-economic data since the COVID-19 pandemic began and data on business sectors not initially expected to be in scope for DST

c) HMRC should develop and implement a plan to identify, and raise awareness among, business groups that are unaware they may be liable for the UK DST, particularly those without a physical presence in the UK

d) HMRC should develop a contingency plan for enforcement against business groups that do not have a physical presence in the UK and fail to engage with HMRC, after exploring the available options. This could include discussions with tax authorities in other countries that operate a digital services tax and have similar interests, to ensure there is a clear pathway for enforcement