Large technology firms were targeted in chancellor Philip Hammond's first Spring Statement.
In a 24-page paper published alongside the Spring Statement today (13 March), the government announced it will push for reforms to the international tax framework in a bid to increase the UK’s tax take from the likes of Amazon, Google and Facebook.
The paper stated the UK government will push to ensure the value created by the participation of users in certain digital businesses is recognised in determining where those businesses' profits are subject to tax.
The paper comes just a few weeks after the government consultation closed on potential changes to the taxation of the digital economy.
Pending reform of the international tax framework, the government stated it will explore interim options to raise revenue from digital businesses that generate value from UK users, such as a tax on revenues that these businesses derive from the UK market.
The paper stated the UK will work with other countries to consider how such a tax could be targeted, designed and co-ordinated to minimise business burdens and distortion.
However, the UK government stated it stands ready to take unilateral action in the absence of sufficient progress on multilateral solutions and pledged immediate action against multinational groups, primarily in the digital sector, who achieve low-tax outcomes by holding their valuable intangible assets such as intellectual property in low-tax countries where they have limited economic substance.
According to the paper this action, which would be taken in accordance with the UK’s international treaty obligations, will help to prevent groups achieving unfair competitive advantages in the UK market in which they operate.
The paper stated: "It will also help to ensure that the discussion on how value is created by the users of certain digital businesses starts from a more sustainable position."