The British government is weighing plans to reduce or even abolish its digital services tax before Wednesday next week to avoid the worst of US President Donald Trump’s trade tariffs.
The British Treasury is considering several options for modifying the so-called tech tax that were proposed by the British Department for Business and Trade, a person briefed on the discussions said.
The possible changes do not include company-specific carve-outs, the person said.
Photo: Bloomberg
The discussions come after the US administration raised their opposition to the tax as part of talks on a “new economic deal” which Trump and British Prime Minister Keir Starmer agreed to explore last month.
The levy is charged at 2 percent of the revenues derived from British users by search engines, social media companies and online marketplaces, making it unpopular with US firms such as Google parent Alphabet Inc, Facebook and Instagram owner Meta Platforms Inc, and Amazon.com Inc.
Trump is conducting a review of all US trading partners, with a view to imposing “reciprocal” tariffs on Wednesday next week in response to anything he deems a tariff or a non-tariff barrier to trade.
British Secretary of State for Business and Trade Jonathan Reynolds on Tuesday last week met in Washington with US administration officials including US Secretary of Commerce Howard Lutnick, US Trade Representative Jamieson Greer and special envoy Mark Burnett.
One person familiar with the discussions said Reynolds was hoping to reach an agreement with the US on the tech levy before Wednesday next week and secure an exemption from further tariffs.
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