The UK Government has indicated that it will resist the European Commission’s (Commission) proposed financial transaction tax. It is proposed that all transactions between institutions where at least one party is based in the EU would be required to pay an EU-wide tax of 0.01 per cent, which is estimated to raise approximately €50m.

The Commission has proposed to “ensure that the financial sector makes a fair contribution at a time of fiscal consolidation in the Member States”. Also, the Commission believes that the tax will “help to reduce competitive distortions in the single market, discourage risky trading activities and complement regulatory measures aimed at avoiding future crises”.

Unsurprisingly, the UK Government objects to the proposed tax as it is estimated that 80 per cent of the sum raised would come from London. The proposed tax would require unanimous support from the Member States.

 Click here for the Commission’s statement.

The Commission has published answers to a list of Frequently Asked Questions