The Chancellor announced in this week’s Budget that the UK is to consult on plans for a digital services tax (DST) of 2% on the UK revenue of certain companies.

Planned for April 2020, it will apply to revenues generated from activities such as search engines, social media platforms and online marketplaces, targeting businesses with global revenues in excess of £500m.

It follows plans by the EU to impose a 3% levy on the revenues of digital firms, although this has divided opinion, with some wanting higher rates than others claim it could breach international treaty obligations.

The UK said it would only apply the DST until “an appropriate long-term solutions is in place”.