Brexit: Microsoft is latest major company to threaten to pull business from the UK

Microsoft has joined a growing list of companies threatening to pull investment from the UK after Brexit.

The tech company - one of the world’s largest – said the potential for “huge” import tariffs on goods meant it may have to reconsider future expansion in Britain.

Theresa May confirmed in her Brexit speech last week that the UK would be leaving the Single Market and the customs union, opening the door for duties to be imposed on imports from the rest of the world.

And Microsoft UK’s Owen Larter said the company was contemplating building and expanding data centres elsewhere in Europe following the vote.

“If all of a sudden there are huge import [tariffs] on server racks from China or from Eastern Europe, where a lot of them are actually assembled, that might change our investment decisions and perhaps we build out our data centres across other European countries,” the government affairs manager said, at a talk on the impact of Brexit on the tech sector.

Mr Larter said the US tech company was currently hoping to build data centres in the UK “at a pretty strong lick” as the market was performing “very well”, but added: “We're really keen to avoid import tariffs on any hardware.”

He continued: “The UK is actually the EU’s largest cloud market at the moment, and is set to double by 2019.

“That kind of bright future is probably not going to be possible if we make it a lot harder to transfer data and store data from the EU into UK data centres.

“This is particularly significant for Microsoft; we’ve just opened two data centres here in the UK.”

After his comments were reported, Microsoft released a statement saying they were "not reflective of the company's view".

"As we have said both before and after the EU referendum vote, Microsoft’s commitment to the UK is unchanged," a spokesperson said.

He also warned about the consequences of strict immigration rules on the firm’s ability to hire staff, saying Microsoft had "struggled internally” to recruit from the US, India and China, Silicon reported.

Several leading banks have already signalled that they will switch operations from the UK to elsewhere in the EU following the Brexit vote.

HSBC and UBS – two of Europe’s biggest banks – are each planning to relocate around 1,000 staff and Goldman Sachs is considering halving its 3,000-strong London workforce.

Economists warn that the full impact of Brexit will not be felt until the UK actually leaves the Brussels bloc, possibly as early as March 2019.

Last October a British company became one of the first to move its HQ to Europe, after 122 years trading from the UK.

Lincolnshire-based firm Smiffys said it could not afford to wait for Article 50 to be triggered and would open an office in the Netherlands.

However, Google and Facebook are pressing ahead with new headquarters in the British capital despite the uncertain conditions.