New tech digital service tax brought in £360 million in revenue.
Tech giants - such as Amazon, Google and Apple - have contributed 30 per cent more into the UK Treasury than expected by the law, which was brought in April 2020, via the new rules than via corporation tax.
The law requires a two per cent charge on all gross sales made by digital companies offering search engines, social media, and online marketplaces.
The UK government - who expects the law to contribute more than £3 billion to the public purse by 2024 to 2025 - exceeded their 2020-21 revenue target of £275 million through the online sales increase during the pandemic, which prompted more online activity.
Gareth Davies, the head of the National Audit Office said: “The digital services tax has succeeded in raising more tax from some big digital companies and has brought in more money than forecast in its first year.
“HMRC could still face challenges enforcing compliance, especially among groups without a physical presence in the UK”.
The tax is applied to gross revenues from digital ad sales and does not apply to online direct sales. It is also aimed at businesses with international sales over $500 million.
Meg Hillier, the chair of the public accounts committee and Labour MP said: “Around 90% of DST collected in 2021-22 comes from just five large business groups. HMRC needs to test whether all businesses – not just the low-hanging fruit – are paying their fair share.”
