Banks Could See Millions in Tax Savings in No-Deal Brexit

A no-deal Brexit would be bad news for most businesses, but banks and financial institutions could be in line for significant tax savings.

If the U.K. leaves the European Union without a deal on the terms of its exit, these financial companies would be allowed to recover value-added taxes on overhead costs incurred in providing products and services—the input VAT. They are barred from doing so under EU rules.

Thirty-five of the U.K.'s largest banks surveyed in 2018 by industry group UK Finance estimated they paid 3.7 billion pounds ($4.8 billion) of irrecoverable VAT during the year.

As VAT ...