Editor's note: This post has been updated to reflect a statement from Microsoft.
Microsoft U.K. government affairs manager Owen Larter said he is concerned that losing access to the European single market will lead to new taxes on imported computer hardware, according to Tech Republic, citing a webinar in which Larter addressed the issue.
If tariffs become too high, Microsoft could pull the plug on its planned data center expansion in Britain, Larter said. "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 datacenters across other European countries."
A Microsoft spokesperson clarified, the Microsoft employee's comments "were not reflective of the company's view. As we have said both before and after the EU referendum, Microsoft's commitment to the U.K. is unchanged." Microsoft wants to ensure data-sharing between the U.K., the EU and the U.S. continues uninterrupted following Brexit.
Microsoft runs multiple data centers across Europe and today there are no customs duties within the EU. When external tariffs arise, EU member states share the cost.
But that could all change following Brexit, which has businesses in the U.K. worried about the additional costs they could face and a potential slow down to innovation.
Larter said there could also be some upsides to Brexit, however, especially when it comes to access to skills. Following Brexit, Microsoft should be able to bring more foreign tech talent to the U.K. from outside Europe.