As published on news.bloomgberg.tax.com, Tuesday October 29, 2019.
A December election in the U.K. will mean that the government’s draft finance bill, which includes a proposal to tax digital giants, will be shelved.
The finance bill for 2019-20 proposed a 2% tax on the digital revenue of companies such as Facebook Inc. and Amazon.com Inc.
The House of Commons voted Oct. 29 438 to 20 on a bill calling for an early election on Dec. 12.
The measure now heads to the House of Lords for a vote. The upper chamber typically follows the view of the lower one, meaning that an early general election is now a near certainty. An election in December means most pending business in Parliament will be shelved.
“The Chancellor and Prime Minister agreed not to take forward the Budget on 6 November. It is usual practice for the Finance Bill to follow a Budget,” a spokesman for Her Majesty’s Treasury said Oct. 29. In the absence of movement on a budget bill, action on the finance bill will also be stalled.
Other measures in the finance bill included limitations on the amount of capital losses that companies can offset against profits, and expanded rules for when a temporary worker can be considered a full-time employee, triggering social security taxes and employee taxes.
Prime Minister Boris Johnson called for a general election after Parliament rejected fast-tracking his Brexit deal by Oct. 31.