In a strategy presentation seen by newspaper the Financial Times, leaders of the remaining 27 EU member states expect the UK to use tax as a weapon and acknowledge that there isn’t much they can do to stop it.
The slides reportedly note that the UK is already a low tax economy with many offshore entities.
The EU27’s proposed approach is to call for binding requirements on information sharing, anti-tax avoidance measures and transparency.
Failure to maintain such agreements includes being blacklisted as an “uncooperative tax jurisdiction”, which is one of a “menu of options” that could be used to sanction the UK, another being the suspension of its trading rights.
The slides echo the EU’s emphasis on a level playing field with the UK and acknowledge existing ‘off the peg’ trade models along the lines of Norway and Canada will not be adequate in the circumstances.
“The UK is a very long way from being a place that can be relied upon by anyone when it comes to tackling tax abuse,” said Richard Murphy, author and tax academic who is professor of practice in international political economy at City, University of London.
“The EU is absolutely right to be concerned. And so should we be, come to that. This abuse happens at cost to the people of the UK as a whole.”
