British financial services could face heavy penalties post-Brexit unless the UK cleans up its tax-haven policies, it has been warned. The EU has announced plans to blacklist and sanction tax-haven countries.

The EU is set to publish a list of tax havens on December 5. Analysis by the Tax Justice Network, using the EU’s own criteria, suggests the UK and five other EU countries would find themselves on the list if the criteria were applied to them.

The EU said the list will only apply to non-EU states. With the UK set to leave the Union in 2019, however, this could see sanctions applied to the UK unless it changes course and ends tax-haven policies, according to Alex Cobham, Tax Justice Network’s chief executive.

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