A report by the National Audit Office (NAO) found that the digital services tax, which was introduced in April 2020 and imposes a 2% charge on the gross revenues made by digital companies, raised 30% more than originally forecast.

HMRC received £358m in digital services tax receipts for the 2020-21 tax year, higher than its initial forecast of £275m, made in July 2019.

By 2024-25, HMRC and the Office of Budget Responsibility (OBR) forecast that cumulative revenue from the tax will exceed £3bn.

The tax applies to large digital companies which have to pay tax where revenue is created, rather than where the businesses are physically located.