UK government to hit Facebook, Google and Amazon with digital services tax
The government will soon impose a ‘digital services tax’ on UK revenues generated by “established tech giants” like Facebook, Google and Amazon.
The 2% levy was announced by chancellor Philip Hammond in the Autumn budget today (29 October). It will come into force in 2020 following a period of consultation.
The announcement follows on from heavy criticism about the amount of tax tech behemoths pay to the treasury. In most instances they are gleaned from ad revenues – in comparison to their UK profit.
How much tax do tech giants pay?
Facebook UK revenues: £1.26bn Tax: £15.8m (2017)
Amazon UK revenues: £72m Tax: £4.5m (2017)
Google UK revenues: £1bn Tax: £36.4m (2016)
Snapchat UK revenues: £26m Tax: £360K (15 months to Dec 2016)
Twitter UK revenues: £76m Tax: £1.2m (2015)
Without going into detail, Hammond said the levy wouldn’t apply to “small UK startups.” But instead be targeted at profitable digital services companies that generate “at least £500m a year in global revenue”.
Kill or cure?
Ahead of the announcement, IAB chief executive Jon Mew argued that such a levy risked harming the UK digital ad market.
“While the government has said it wants to focus new measures on larger businesses, it would be difficult to avoid collateral damage across the sector and a negative effect on competition,” Mew warned.
“A tax on revenue would create a disincentive for competitors to set up and grow in the UK market. And would impact on mid-market players who drive competition and provide choice.”
Mew suggested that if the government was truly committed to leading the charge on innovation-friendly regulation that supports the growth of the tech sector then it should focus on supporting efforts to accelerate the EU Commission and OECD process to agree to an international approach to digital taxation.
Source: The Drum
Love Island: inside ITV’s social media strategy
When your show sells thousands of branded water bottles, it has to be doing something right. For 2018, the broadcaster’s social media team are being pragmatic about the platforms they’re using to interact with viewers; decoupling from Snapchat to crack on with Instagram Stories instead.
ITV senior digital producers Kenny England said he believed ITV 2’s Snapchat issue weren’t due to a sudden decline in interest of Love Island, but that the dip was platform-specific, and in part due to the app’s poorly-received redesign.
In the first month alone Love Island’s official account has “nearly doubled” its Instagram audience. The page has been using Instagram’s Stories product to direct fans to quizzes, divulge teaser soundbites and share its popular ‘The First Look’ video, which gives viewers a two-minute daily preview of the upcoming episode.
While it is pulling away from Snapchat, the show is still investing a lot of resource in Twitter, which England said gives fans a platform to discuss the show, especially its “watercooler moments” in real-time.
“Love Island has become so important to Twitter that the company took out a cover-wrap of the Metro on the day of the first episode, just to remind people to use it while watching the show,” he added.
Of the platforms Series Four is using, England described Instagram as the ‘perfect‘ one. The visual tone of it, he noted, matches the show’s own attention to visual perfection, which affects everything from set backdrops to the contestants themselves.
The partnerships too have expanded from those with [main sponsor] Superdrug and Ministry of Sound that ran during Series Three, to 10 partners for Series Four, including Missguided and Domino’s.
This expansion is allowing Love Island’s team to achieve more for their audiences, and for commercial partners to explore new engagement avenues. It could lead to larger audiences, and a few more accolades along the way.