BDO has warned that the European Commission could force the financial transaction tax on all member states, including the UK, by changing it from a tax to a charge.
BDO partner and head of financial services Tim Kirk says member states would not be able to veto the FTT if it is positioned as a charge. He says: “The FTT could be driven through for all 27 member states as a transaction charge so it is not a tax and not subject to a veto. The Commission finds ways to get the things it wants.”
The UK has refused to back the tax, which was proposed by the EC in September. It would see a 0.1 per cent tax on stock and bond trading and 0.01 per cent on derivatives contracts. The tax would come into effect in 2014 and the EU predicts it would raise £50bn a year.
Chancellor George Osborne says the tax would hit individual savers rather than the banks.
The IMA says the UK is now in a weaker position to influence policy around the FTT after Prime Minister David Cameron rejected a new European treaty designed to deliver greater fiscal discipline across member states.
Chief executive Richard Saunders says: “It is difficult to argue that we are in a better place on financial regulation this week than we were last week. It is business as usual on negotiating directives but there is no question that the UK is in a less strong position than it was before in terms of cutting political deals.
“We will have to work hard to ensure the UK industry’s voice is heard in Brussels.”