Brexit, COVID-19 cast shadow over UK tax take from finance, reports say

[snoop1130]

Brexit, COVID-19 cast shadow over UK tax take from finance, reports say

By Huw Jones

 

FILE PHOTO: Buildings are seen in the Canary Wharf business district, amid the outbreak of the coronavirus disease (COVID-19), in London, Britain January 27, 2021. REUTERS/Peter Cziborra/File Photo

 

LONDON (Reuters) - Britain’s tax receipts from its huge financial services sector are set to fall from this year as the City of London loses business to the European Union and fallout from the coronavirus pandemic continues, according to two reports issued on Wednesday.

 

The City of London Corporation, which administers the capital’s financial district, said the tax contribution of 75.6 billion pounds in the year to March 2020 was little changed from 75.5 billion pounds in the prior period, despite uncertainties over Britain’s future relations with the European Union.

 

“However, the future is uncertain, and we do not yet know the long-term impacts of the pandemic, Brexit and changes in ways of working,” City leader Catherine McGuinness said.

 

The 135 billion pound financial sector accounts for more than 10% of UK tax receipts.

 

Receipts are expected to ease in the current financial year that ends next month to between 71.1 billion and 75.7 billion, consultants PwC estimated in a report for the City.

 

“The transition to new trading arrangements between the UK and the EU will put further downward pressure on the recovery of the financial services sector,” the report said.

 

Britain’s new trade deal with the bloc, which took effect on Jan. 1, does not cover financial and other services, with the City likely to get only limited “equivalence”-based access to the EU financial market for the foreseeable future.

 

Separately on Wednesday, the Centre for Economics and Business Research said in a report for the Mayor of London that Brexit will potentially cost London’s economy 9.5 billion pounds a year.

 

London’s financial and professional services sector alone, 15% of the capital’s gross value added, is set to account for more than 2 billion pounds in lost GDP per year, the CEBR report said.

 

“These losses could be even higher if the government fails to secure additional agreements with the EU on hugely important areas of regulatory equivalence,” Mayor of London Sadiq Khan said.

 

Financial services exports to the EU in recent years have totalled about 26 billion pounds annually, but some of this activity has already moved to the bloc.

 

-- © Copyright Reuters 2021-02-10

 

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[rupert the bear]

what we can say is every economy is going to be hit hard,developed and undeveloped countries,across the EU far east and look here its fallen off the back of the bus,the EU is determined to punish UK thats obvious so i guess theyll look to new fields ,some old ,oz /nz, north and south america,south africa,new fod sources etc that will be cheaper and more beneficial to others,swiss financial mkt just opened up to them.they could screw around with EU too,give vaccs to irish and spanish/ports too. im sure saving all those lives will really annoy brussels.its a sad state of affairs thats for sure and all will suffer,its nuts the paperworks astounding.govt shining thru as per usual.these aholes are running our lives....into the ground

[dunroaming]

In the fullness of time we will be back in bed with the EU.  It will be business led and after this shower of so called politicians have all been kicked into touch.

[RayC]

15 hours ago, dunroaming said:

In the fullness of time we will be back in bed with the EU.  It will be business led and after this shower of so called politicians have all been kicked into touch.

 

Hmm... I hope that you are correct and might have agreed with you until recently. I now fear that we are stuck with Johnson and his cronyies for a good while yet.

 

Credit where credit's due, the vaccination programme in the UK - from inception up to now - has been successful. If this continues to be the case (let's hope so), and some semblance of normality returns to the UK before the rest of Europe, everything else - the mismanagement of the Brexit process, and the appalling lack of a coherent strategy for dealing with the Covid crisis last year - will likely be forgotten. 

 

Imo Johnson has two essential attributes for a politician: charisma and luck and these trump all other attributes.