George Osborne bristles as EU moves closer to financial transaction tax

George Osborne bristles as EU moves closer to financial transaction tax

Chancellor says he would mount fresh legal challenge if the final design of the tax has implications for the UK.

The European Union moved closer to a tax on financial transactions after 10 member states agreed to implement the levy by 1 January 2016, angering George Osborne who threatened a fresh legal challenge to the tax.

The group, led by Germany and France, told a meeting of Europe’s finance ministers in Brussels on Tuesday that they planned to introduce a tax on a phased basis, starting with the taxation of “shares and some derivatives”, but the details of exactly how it would work have yet to be agreed.

Osborne said he would not hesitate to mount a fresh legal challenge if the final design of a financial transaction tax (FTT) had implications for the UK, even though Britain will not implement the tax.

Last week the European court of justice said the UK could not block attempts to use an FTT because it was not yet in operation. However, a legal challenge is still possible once an FTT has been finalised.

The chancellor has been long opposed to the levy, which he argues would damage the City and weigh on growth, jobs and investment in the UK.

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