The Treasury could lose up to £66 billion a year in tax revenues under a hard Brexit, a leaked paper discloses

Cabinet ministers are being warned that the Treasury could lose up to £66 billion a year in tax revenues under a “hard Brexit”, according to leaked government papers.

GDP could fall by as much as 9.5 per cent if Britain leaves the single market and has to rely on World Trade Organisation rules for trading with the continent, compared with if it stayed within the EU, the forecasts show. Such a steep drop in revenue would force ministers to slash public spending or raise taxes.

The £66 billion drop, contained in a draft cabinet committee paper seen by The Times, is nearly a tenth of the £716 billion that the government is projected to collect in taxes this year, and is equivalent to 65