Everyone's claiming that everyone would avoid this tax by dealing only in cash, or by batching up all their transactions to a monthly central clearing house, or whatever.
But that the moment there is ALREADY a transaction tax on basically all B2C transactions. The credit card company + payment gateway takes between 1% and 3.5%+20p per transaction. If my business took cash payments, Barclays would charge me 0.9% to deposit cash in my bank, and I'd want to consider hiring security to move it to the bank, and buying a safe to keep it in on my premises. Giving a tiny percentage to the Government wouldn't make any difference to my cash handling costs.
Admittedly, BACS is free, but I don't see everyone buying their daily groceries by BACS to avoid the fees. The convenience of the credit cards wins out, even when it costs merchants money. Why would an additional 0.5% or whatever on those fees cause everyone to abandon existing, convenient systems?
Perhaps B2B is different, and the sums are certainly larger, but if it cost me 1% to receive a payment by BACS, that wouldn't be enough for me to want to get the train to my customer to take payment in the form of a big bag of cash, which I would then have to worry about storing securely, or have to pay to pay into my bank anyway. That convenience is worth way more than 1% to me.
Whilst I'm not certain that a transaction tax isn't loopy - the Payment Card Industry provides the infrastructure that allows Credit and Debit card transactions, and funds it from a transaction tax which no one really objects to. The Government provides the infrastructure that makes all commerce possible - the existence of a stable currency and the rule of law, for a start, so it's not obviously to me why they haven't as much justification to claim a transaction tax as Visa and Mastercard have.