• by Sean Hargrave , Staff Writer, March 11, 2020

For the average person in the street, this question was going to be focussed on how much extra money the Chancellor would give to the NHS to cope with coronavirus and whether he would make sure sick workers would get statutory sick pay even if they had not contracted the virus but were just advised to self isolate.

The answer was, of course, that workers would get sick pay -- whatever the reason for staying at home -- and the NHS would give whatever it needs.

What's more, companies with fewer than 250 employees would get this covered by the Government. In addition, companies suffering with cash flow were given permission to put off paying tax and a new temporary loan scheme was launched to help businesses get through the crisis. To be fair, I don't think any businesses could really ask for more. 

While the digital industries were obviously interested in this, because a lot of people work in the industry and they have bills to pay too, there was a longer-term question -- the Digital Services Tax.

It was due to be introduced in April, hitting the tech giants with a 2% direct tax on their sales. It was intended as a way to tax the tech giants directly because they are so adept at draining billions of pounds worth of business from the UK but then (legally) accounting for profits in lower tax regime.

It was, of course, highly controversial. President Trump saw red, and his threat of retaliatory tariffs was a major concern. France tried to stand up to the President with its own direct digital sales tax, but blinked when it looked at the eye-opening tariffs that would have been raised against its wine, champagne and foodstuffs.

The compromise agreed upon was that the country would hold off until all could see what new rules the OECD could come up with by the end of 2020 to tax the tech giants in a more fair way.

The UK's previous chancellor, Sajid Javid, maintained that the French decision would not impact the UK and the introduction of the Digital Service Tax would go ahead as planned in April 2020. It seemed a brave position. President Trump is the go-to guy for a trade deal for the UK to see us out of what might be a tough time if a decent deal cannot be arranged with the EU by the end of 2020.

Then came today's budget speech and... well, actually nothing. It didn't get a mention. I have searched high and low and agree with City A.M. that this almost certainly means the proposed tax will be dropped. It didn't get a mention in the speech, and there's nothing coming out of the Treasury to provide guidance. 

It's hard to know for sure, but it looks very much like Trump stared and Boris blinked and the Chancellor swerved a controversial tax.