Tax and the City briefing for February 2017

Brexit: impact on financial services

After months of speculation the prime minister’s confirmation last month that although the UK cannot remain in the single market after Brexit the deal to be negotiated with the EU might contain ‘elements’ of the current single market arrangements such as the freedom to provide financial services across national borders was welcomed by the City. The ‘phased process of implementation’ to allow businesses time to plan and prepare for any legal and regulatory change has at least gone some way to answering the cries of the industry for transitional arrangements.

This recognition of the contribution of the financial services industry to the economy is essential. PwC’s November 2016 report for the BBA estimated that the total tax contribution of the banking sector for...