UK could slash corporation tax to 10% if EU blocks trade deal in Brexit: Report

According to the report, the idea had been put forward by PM Theresa May's advisers amid growing fears other EU member states will take a hard line in Brexit negotiations.

By: Reuters | London | Updated: October 23, 2016 3:25 pm
EU, european union, brexit, brexit EU, EU tax, tax on eu, tax post brexit, latest news, latest world news File Photo: Pro-EU membership supporter holds an EU flag outside the High Court, in London, Oct. 13, 2016.  (Source: AP Photo/Matt Dunham)

Britain could slash its headline corporation tax rate to 10 percent from 20 percent if the European Union refuses to agree a post-Brexit free trade deal or blocks UK-based financial services firms from accessing its market, the Sunday Times reported, citing an unidentified source.

The newspaper said the idea had been put forward by Prime Minister Theresa May’s advisers amid growing fears other EU member states will take a hard line in Brexit negotiations.

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The proposal would be used to try and persuade the EU to grant “passporting” rights for financial services firms to continue operating across the EU, the newspaper said.

“People say we have not got any cards,” the newspaper quoted an unidentified source familiar with the government’s thinking as 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 percent,” the newspaper quoted an anonymous source as saying,” the source was quoted as saying.