The plan laid out by the Treasury would be to tax large digital companies, which are profitable and which generate more than £500m a year in global revenues.
A levy would apply to the advertising revenues social media and search engines generate from UK users, but would also be on the revenues a marketplace generates from facilitating a transaction between UK users.
Mel Stride, the Treasury Minister, told The Daily Telegraph late last month that the department would “digest very carefully what people have come forward with” in the consultation.
He claimed that a lot of the larger technology companies “just want something sorted, which is fair and reasonable and proportionate”.
However, sources familiar with the matter said the consultation had prompted “a lot of negative responses to what is a very muddled idea”. Others said many has suggested the tax, as it was planned, was “poorly crafted”.
The full response from industry body techUK, seen by The Daily Telegraph and submitted as part of the consultation, urged the Treasury to “reconsider bringing this new and disruptive tax in from April 2020”.
“We recommend that businesses be given a minimum of 18 months from the date when legislation is finalised in order to build the systems needed to comply with the requirements of the digital services tax,” the group said.