The government is planning to introduce a new turnover tax on internet giants - tailored nearly exclusively for Amazon, eBay, Facebook and Google - that will be introduced in tax year 2020-21. The UK has been leading attempts to deliver worldwide corporate tax reform for the digital age.
The OECD has also been trying to reach a consensus among its 36 member countries on a similar tax. "While we will have to wait until April 2020 for the tax to take effect, the most important take-away is the intention for a targeted United Kingdom revenue tax, levied only on profitable companies that generate at least £500m in global revenue each year".
But the prime minister rejected such talk, saying: "We are not preparing for another general election".
But Dame Margaret Hodge, a former chairwoman of the Commons Public Accounts Committee who repeatedly challenged tech giants over their taxes, said the £400 million tax was "simply gesture politics".
However, Finance Secretary Derek Mackay said: "According to this Budget, the Scottish Government's resource block grant from the UK Government - the money we are able to invest in day to day public services - remains nearly £2billion lower next year compared with 2010-11".
Setting out his income tax cuts, Mr Hammond said the personal allowance will rise to £12,500 from April 2019 and the higher rate threshold will rise to £50,000.
She would also like to see measures introduced to minimise the impact of the HMRC's planned rollout of Making Tax Digital, a major change to the way tax is collected, which will place disproportionate additional compliance and administration burdens on smaller businesses.
It is aimed, Hammond said, at "established tech giants" rather than startups, principally Amazon, eBay, Facebook and Google.
He added: "Google and Amazon have been avoiding tax payments which has given them an unfair edge over the competition [but] online retailers' financial advantage over bricks and mortar competitors is not the reason for the struggle and failure of traditional high street names". Companies have been accused of falsely reporting or reducing profits in order to pay less tax.
In that case, the government would be very unlikely to pass tax rises through parliament, meaning spending promises would need to be financed out of the deficit. In a column on The Drum, IAB chief executive Jon Mew argued that such a tax risked harming the UK's digital ad market.