Businesses are liable to the DST when the group’s businesses worldwide revenues from the specified digital activities are more than £500 million and more than £25 million of these revenues are derived from UK users. There is an allowance of £25 million, which means a group’s first £25 million of revenues derived from UK users will not be subject to Digital Services Tax.

The following three services are considered digital services activities for the purposes of DST:

• a social media service,
• an internet search engine; or
• an online marketplace.

A group can make a voluntary election to calculate the liability to DST using an alternative basis of charge provision. The alternative basis of charge will benefit groups making a loss or operating at a low margin on their UK digital services activity.

There will be a review of DST by HM Treasury before the end of 2025 which will be laid before Parliament.