Britain, a tax haven?
During her speech, May also threatened to transform the UK into a tax haven if the European Union negotiates a bad deal for Brexit, by embracing highly favourable tax policies to lure business from Europe.
“No deal for Britain is better than a bad deal for Britain,” she warned.
“We would have the freedom to set the competitive tax rates and embrace the polices that would attract the world’s best companies and biggest investors to Britain. If we were excluded from the single market we would be free to change the basis for the UK’s economic model.”
Competition for Jersey
The threat came just days after the chancellor of the exchequer Philip Hammond said, in an interview with German newspaper Die Welt, if the EU sought to punish the UK during Brexit negotiations, he would be “forced to do something different”, implying that the UK could become a tax haven post-Brexit.
If implemented, it could mean the UK would be in competition with its crown dependencies – the Isle of Man, Jersey and Guernsey – often referred to as tax havens due to their super low or no corporate tax in a bid to attract businesses to the islands.
Geoff Cook, chief executive of Jersey Finance, the organisation responsible for promoting the business interests of the island, said that the UK pursuing lower corporate tax rates would not hurt Jersey’s finance industry.
“Jersey’s relationship with the UK is very much a partnership and it is in Jersey’s finance industry’s best interests to see the UK succeed and attract business flows.
“At the same time, Jersey provides a vital route for channelling investment from around the world into the UK, with our ‘Value to the UK’ report last year showing that Jersey is a conduit for £1/2trn of foreign investment into the UK economy.
“We don’t see that mutually beneficial relationship changing,” Cook told International Adviser.
