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Europe rejects UK's financial transaction tax challenge | Europe rejects UK's financial transaction tax challenge |
(35 minutes later) | |
Europe's top court has rejected the UK's challenge to the introduction of an EU financial transactions tax (FTT), which ministers have said will damage British firms. | Europe's top court has rejected the UK's challenge to the introduction of an EU financial transactions tax (FTT), which ministers have said will damage British firms. |
The European Court of Justice (ECJ) described the UK's challenge as premature, since the details of the tax had not been finalised. | |
The FTT will be adopted by 11 EU states, but not by Britain. | The FTT will be adopted by 11 EU states, but not by Britain. |
The UK said it was prepared to take further legal action. | The UK said it was prepared to take further legal action. |
Continued challenge | Continued challenge |
"The government is determined to continue to ensure that the interests of countries outside of the single currency, but inside the single market, are properly protected," a UK Treasury spokesman said. | "The government is determined to continue to ensure that the interests of countries outside of the single currency, but inside the single market, are properly protected," a UK Treasury spokesman said. |
The levy, often described as a Tobin tax or "Robin Hood" tax, aims to raise public funds and discourage speculative trading by taxing the transactions of shares, currencies and bonds. | The levy, often described as a Tobin tax or "Robin Hood" tax, aims to raise public funds and discourage speculative trading by taxing the transactions of shares, currencies and bonds. |
Of the 27 EU member states, the 11 going ahead with the FTT are Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Slovenia, Slovakia and Estonia. | Of the 27 EU member states, the 11 going ahead with the FTT are Germany, France, Italy, Spain, Belgium, Austria, Portugal, Greece, Slovenia, Slovakia and Estonia. |
Those countries had not yet decided how the tax will work, the ECJ said, so the UK's challenge was premature. | Those countries had not yet decided how the tax will work, the ECJ said, so the UK's challenge was premature. |
The City of London could be hit by the tax if, for example, a British firm trades with branches of French or German banks based in the capital. | The City of London could be hit by the tax if, for example, a British firm trades with branches of French or German banks based in the capital. |
'Rich square mile' | 'Rich square mile' |
"Once the tax has been worked through, then that is when the UK needs to step in and challenge any extra-territorial elements of that tax," said Chas Roy-Chowdhury, head of tax at international accounting body ACCA. | "Once the tax has been worked through, then that is when the UK needs to step in and challenge any extra-territorial elements of that tax," said Chas Roy-Chowdhury, head of tax at international accounting body ACCA. |
"That is when I think they could win if the tax is not modified quite drastically." | "That is when I think they could win if the tax is not modified quite drastically." |
UK Prime Minister David Cameron has previously said the tax was "not a good idea" and that it would not work unless applied globally. | UK Prime Minister David Cameron has previously said the tax was "not a good idea" and that it would not work unless applied globally. |
And UK Chancellor George Osborne has also raised concerns that the cost of the tax would be passed on to pensioners and savers. | And UK Chancellor George Osborne has also raised concerns that the cost of the tax would be passed on to pensioners and savers. |
But campaigners have said the tax would raise valuable funds for public services, and accused the UK government of "defending one rather rich square mile". | But campaigners have said the tax would raise valuable funds for public services, and accused the UK government of "defending one rather rich square mile". |