Will the UK slash its corporate tax if Brexit trade negotiations stall?
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Will the UK slash its corporate tax if Brexit trade negotiations stall?

Source says UK could go to 10 per cent rate

Britain could slash its headline corporation tax rate to 10 per cent from 20 per cent 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.

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 per cent," the newspaper quoted an anonymous source as saying.

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