London traders to pay €17bn a year in transaction tax

Traders in the City of London will pay up to €17bn a year under the EU’s plan for a financial transaction tax but none of it will go to the British Treasury because they have opted out, according to accountants Ernst & Young.

Ireland has also opted out, even though the European Commission estimated that the country would stand to gain around €750m a year from the tax, but the Government says it fears losing jobs from the financial services sector if it adopted the tax.

Ernst & Young, one of the big four accountancy firms in the world, points out that 75% of transactions that would be subject to the tax take place in London, and at least 60% involve at least one party based in another EU country.