Theresa May is set to trigger Article 50 – the legal step that starts Brexit talks
The European Commission wants to make Britain to pay a €60billion (£50billion) exit bill to cover the costs of the UK leaving the EU.
Michel Barnier, the EU's chief negotiator, said: “There is no price to pay to leave, but we must settle the accounts. No more, no less.
“We will not ask the British to pay a single euro for something they have not agreed to as a member."
But the UK is refusing to pay such a high divorce bill with International Trade Secretary Liam Fox dismissing the suggestion as “absurd”.
After Britain leaves the EU, the other member states could descend into infighting over which countries pay extra to fill the budget gap.
Why is Britain so important to the EU budget?
Britain is one of the biggest contributors to the EU budget and has one of the largest economies in the European bloc.
The UK was the third largest net contributor to the EU budget after the two most powerful EU nations – Germany and France – in 2015.
This country pays about £18billion towards the EU budget every year – this amount is the country’s "gross" contribution to Brussels.
But a £5billion rebate is taken off the bill so the country actually pays £13billion, according to the latest estimates for 2015.
In addition the EU gives back money for farmers, development in poor areas and other projects, leaving Britain's net contribution at £8.5billion.
Brussels also returns some money to the private sector, mainly for research.
EU funds cover the administrative costs of European institutions as well as funding counter-terrorism, job creation, agriculture and regional development.
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What will happen to the EU budget after Brexit?
Germany’s Foreign Affairs Minister Sigmar Gabriel has argued that his country should pay more to the EU budget because it profits the most from EU money.
But in January Deputy Finance Minister Jens Spahn said that Germany was not willing to automatically increase its contribution.
"If Britain's contribution falls away, the EU budget will shrink," Jens Spahn told the newspaper Handelsblatt.
"There is certainly no automatic mechanism that (would make) Germany and other net contributors increase their contribution.”
Danish finance minister Kristian Jensen has also told EU bosses they “cannot continue spending the same amount of money” once the UK leaves the bloc.