Question to the HM Treasury:

To ask His Majesty's Government, what plans they have to tax UK businesses, aside from the private rented housing sector, on turnover rather than profits.

The Government acknowledges the potential challenges and distortions that can arise from revenue-based taxes, and it does not currently plan to introduce another revenue-based tax.

The UK has introduced a 2 per cent tax on the revenues derived from providing a social media platform, search engine or online marketplace to UK users: the Digital Services Tax (DST). However, the UK’s DST is an interim solution to widely held concerns with international corporate tax.

The Government has introduced the Electricity Generator Levy (EGL) – a temporary 45% additional levy on extraordinary returns from 1 January 2023. It applies to generation from renewable (including biomass), nuclear and energy from waste sources. The EGL applies to revenues from selling electricity for a period above a benchmark price, which is set at approximately 50% more than the average price of electricity over the last decade.

The Government has introduced a number of measures to ensure that large multinational businesses with entities in a number of jurisdictions pay their fair share of Corporation Tax in the UK. These include introducing the Diverted Profits Tax in April 2015 and the Corporate Interest Restriction Rules in 2017, which are designed to prevent profits attributable to UK activities from being shifted overseas.

The Government keeps the tax system under constant review.