Digital taxation focus cannot not delay urgent business rates reform, also welcomes APPG report

By | March 23, 2018

 UKHospitality: digital taxation focus cannot not delay urgent business rates reform, also welcomes APPG report

UKHospitality today welcomed the European Commission’s publication of proposals aimed at a fair taxation of the digital economy and online platforms.

The proposals are designed to ensure that online platforms, including ‘collaborative’ economy related platforms and online market places, pay proportionate taxes in Europe, corresponding to the value created in the different European markets in which they are operating.

UKHospitality is calling on the Government to acknowledge the recommendations and push ahead with reforms at earliest opportunity to address the tax inequality being faced by high street businesses compared to online businesses.

UKHospitality CEO, Kate Nicholls, said: “Taxation methods must evolve to keep pace with the impacts of the rapid rise in digital commerce and the Commission’s proposals are a welcome acknowledgement of this.

“The Government needs to act on these recommendations at the earliest opportunity, to begin tacking the tax inequality being faced by high street businesses, particularly the hospitality sector. The most acute inequality is in businesses rates and the Government must act to address this imbalance which sees businesses in town and city centres all around the UK shouldering a disproportionate tax burden.

“The fiscal neutrality of business rates sees an ever-dwindling number of high street businesses each paying more into a fixed pot. This system fundamentally does not work and needs a complete overhaul to ensure that online businesses pay their fair share.

“Proportionate revenues from digital companies can be used to relieve the burden on companies hardest hit by business rates, while the long-overdue root and branch review of the system, as promised by the Government, takes place.”

UKHospitality welcomes APPG report

UKHospitality has welcomed a report from a group of MPs that has investigated the impacts of the sharing economy.

The interim report from the All Party Parliamentary Group for Tourism (The Sharing Economy: Maximising Benefits while Reducing Adverse Outcomes), has been heralded as a step towards better understanding of local and national economic and social impacts, to inform measures to ensure a more level playing field between competitors.

The ‘home sharing economy’ has grown rapidly and regulations have failed to keep up as a consequence. The UK is lagging behind its European counterparts, who have introduced regulation in an effort to ensure compliance with safety measures as well as protect traditional housing stock.

UKHospitality provided oral and written evidence to the report, raising concerns that the hotel sector is unfairly taxed compared to sharing economy platforms, giving these providers an unfair fiscal advantage. 

UKHospitality Chief Executive Kate Nicholls, said:  

“UKHospitality has been calling for action in a number of areas that the Government must address.

“Many online platforms are headquartered abroad and pay comparatively little UK Corporation Tax as a result. They often pay far less in business rates, given that they do not own many physical assets, compared to traditional accommodation providers, who are also subject to a rate of VAT of 20% – amongst the highest in Europe and making UK hospitality businesses uncompetitive compared to their European competitors.

“Visitors and communities are being put at risk when legal safety requirements are reliant on the goodwill and compliance of hosts rather than independent checks and enforcement.

“We are pleased that this report highlights these disparities and recommends a level playing field for all accommodation providers in terms of regulatory compliance and taxation. We look forward to liaising with policymakers to make this a reality”.

Alex Midgley

Jefferson Communications

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