Key announcements on Digital Services tax, calls for evidence on fintech, cryptoassets and payment landscape review.
The Chancellor, Rishi Sunak MP, yesterday delivered the 2020 Budget. It included various key issues of interest for tech lawyers.
Digital Services Tax
The Chancellor confirmed the introduction of a Digital Services Tax. From April 2020, the government will introduce a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users.
Zero rate VAT for digital publications
The Government will also introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, so e-books, e-newspapers, e-magazines and academic e-journals have the same VAT treatment as their physical counterparts. The zero rate will not apply to audiobooks.
Digital currencies discussion paper
The government says that it is looking forward to the publication of the Bank of England’s discussion paper on a possible UK central bank digital currency.
The government aims to protect consumers and support innovation in cryptoassets. It therefore intends to consult on a measure to bring certain cryptoassets into scope of financial promotions regulation. The government also intends to consult later in 2020 on the broader regulatory approach to cryptoassets, including new challenges from so-called ‘stablecoins’.
The government will accept all six of the Furman Review’s strategic recommendations for unlocking competition in digital markets.
Fintech review and delivery panel
The government has invited Ron Kalifa OBE to lead a major review into the fintech sector. The review will identify what more industry and government can do to support growth and competitiveness. The government will also extend funding for the Fintech Delivery Panel.
Digital Identity Unit
The government will work to create a digital identity market so that people do not have to show paper documents.
Call for evidence for the Payments Landscape Review
In light of rapid technology developments, HM Treasury, along with regulators and the Financial Policy Committee, is leading a Payments Landscape Review of the UK’s payments infrastructure and regulation. As part of this, HM Treasury will shortly be publishing a call for evidence to ask what more could be done by the government, industry and regulators to support a more innovative and resilient payments system.