Warning to Europe over Brexit talks

UK may cut corporation tax in battle with Brussels

May: tax cut threat
May: tax cut threat

Britain is ready to ramp up pressure on Brussels over the Brexit negotiations by cutting the headline corporation tax rate by half to 10%.

Government advisers have come up with idea to counter European Union threats to block UK-based financial services firms from accessing the single market.

It comes amid warnings from EU member states that they will take a hard line over the Brexit talks and refuse to allow Britain flexibility on the free movement of labour.

Of particular concern to UK ministers is giving financial services firms continued “passporting”.

A Sunday newspaper quoted a source close to the Prime Minister Theresa May saying: “We have some quite good cards we can play if they start getting difficult with us.

“If they’re saying no passporting and high trade tariffs we can cut corporation tax to 10%.”

The move coincides with further warnings from bankers that large banks are preparing to relocate operations to other European capitals.


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