UK Finance has been accused of cherrypicking data after its annual tax report excluded Paris, where banks face a higher total tax rate than in London, the Guardian reported on Friday.
The lobby group, which represents Lloyds, JP Morgan and Revolut, commissioned PwC to calculate the total tax rate for a large bank across rival financial hubs. The report listed London at 46.2 per cent, compared with 42.2 per cent in Amsterdam, 39.1 per cent in Frankfurt, 29 per cent in Dublin and 27.9 per cent in New York. Paris, host to large investment banks including JP Morgan, Goldman Sachs and Barclays, was not included.
Calculations by the Guardian, reviewed by a leading accountancy firm, showed the same bank in Paris would face a total tax rate of between 51.6 per cent and 57.3 per cent, up to 11.1 percentage points higher than London. UK Finance said it had considered including Paris but could not produce a robust like-for-like figure using the report's model bank. The five cities included have remained consistent to support comparison over time, it added.
The figures were shared with Chancellor John Healey in a recent letter warning that banks could shift business and jobs to rival hubs if threatened with higher bills at next week's budget. Paul Nowak, general secretary of the Trades Union Congress, called the omission a misleading attempt to make the case against fair taxes. Simon Youel, head of policy at Positive Money, said the absence of Paris raised the question of whether it was cynically omitted to allow UK Finance to claim the City contributes more tax than any other global financial sector.
CS Venkatakrishnan, chief executive of Barclays, told journalists on Thursday that the financial hit from a tax rise for banks would be bearable and gave the chancellor his full support. Jamie Dimon, the JP Morgan boss, warned in May that he could scrap plans for a £3 billion London headquarters if Britain became hostile to banks. Dimon met Andy Burnham and Healey last month and warned that further levies could put investment and jobs at risk.
The TUC says reversing cuts and increasing the bank surcharge from 3 per cent to 8 per cent could raise £2.25 billion per year.
Why it matters for wealth
The dispute over tax data highlights the difficulty of assessing jurisdictional competitiveness when lobby groups control the comparisons. For wealth planning, the exclusion of a major hub from industry-backed reports may mean published rankings understate the relative attractiveness of London or other centres.
A Treasury spokesperson said decisions on tax are a matter for the chancellor to set out at fiscal events, with the budget due next week.
Source: The Guardian
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