Lobby group UK Finance has been accused of cherrypicking data to mislead the British government regarding the tax competitiveness of London compared to rival financial hubs. The group claims that a tax rise for banks in the upcoming budget would diminish London’s appeal, but campaigners argue that their figures are misleading as they exclude Paris, a major competitor.
Tax Comparisons
UK Finance, which represents banks such as Lloyds, JP Morgan, and Revolut, commissions an annual report from PwC that calculates the total taxes borne by large banks. This report indicates that London has a total tax rate of 46.2%, compared to 42.2% in Amsterdam, 39.1% in Frankfurt, 29% in Dublin, and 27.9% in New York.
However, the report has faced scrutiny for not including Paris, which hosts many large investment banks, including JP Morgan, Goldman Sachs, and Barclays. Calculations by the Guardian, reviewed by a leading accountancy firm, suggest that a bank in Paris would face a total tax rate between 51.6% and 57.3%, significantly higher than London’s rate.
Questions Raised
UK Finance stated that it considered including Paris but could not produce a robust comparison using its model. Critics, however, argue that excluding Paris is a significant oversight, especially as banks seek to protect their profits amid rising taxes expected in the upcoming budget.
