The Treasury could lose up to £66bn a year in tax revenues according to leaked government papers if the government opts for ‘hard brexit’ and leaves the single market. If no alternative arrangement is put in place, World Trade Organisation rules would impose tariffs and barriers on UK trade that could result in GDP falling as much as 9.5%. The figure of £66bn represents nearly a tenth of all taxes that the Treasury expects to collect this year, and would likely force the government to either cut public spending or raise taxes to make up the shortfall. Senior Brexit supporters have strongly criticised the leaked papers, commenting that the report is “withdrawn from reality” and “not very realistic” as it portrays the worst possible scenario in assuming that no current trade deals would continue.
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