The Government have announced that we will be introducing a digital services tax on the UK revenues of large social media platforms, search engines and online marketplaces. The tax is expected to raise around £1.5 billion over four years, ensuring that digital businesses make a fair contribution to the public finances.
Members of Market Harborough chamber of commerce and my local Federation of Small Businesses have for some time been calling for the Chancellor to bring in a new tax on the digital giants and to use the proceeds to help small businesses on the high street. First, may I congratulate the Chancellor on taking such sensible economic advice? Secondly, can he tell us how much small businesses will benefit by?
I am grateful to my hon. Friend and his constituents for the advice; and, while we are at it, I wish him a happy birthday. The digital services tax aims to improve sustainability and fairness in the tax system. Separately, the Government have announced measures to support small retailers by cutting their business rates by one third for two years. Just to put that in a local context for my hon. Friend, there are 660 retail properties in Harborough local authority area with a rateable value of below £51,000, which means that there are 660 properties that could benefit.
As I said last week, the proposal is to introduce the tax in 2020, but in the meantime we will continue to lead international negotiations on the potential for an internationally agreed tax. Such a tax would in fact be preferable to nationally implemented schemes, but at the moment it is proving very difficult to agree. I hope that, by the time we get to our implementation date in April 2020, we may yet have made progress on an internationally agreed measure.