The British Bankers Association have, according to the FT said that:
The financial services industry could suffer "irrecoverable collateral damage", unless the government defers and reconsiders its tax changes for foreign residents
I find this astonishing. Do they really think anyone is stupid enough to believe this?
As I noted yesterday, maybe 1,000 people will leave the UK directly as a result of this - at most 5,000 or 6,000 will over time based on surveys who are seeking to promote the idea that the change is harmful.
How on earth could this cause "irrecoverable collateral damage", not least when no other serious financial centre in the world has an equivalent arrangement?
These guys have simply lost touch with reality. It's the only possible explanation for quite a lot of what has happened in the City of late.
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This is, in my humble opinion, utter garbage – the lunatic rantings of what were once called “teenage scribblers” (although actually middle aged) who would be more appropriately employed by the Sunday Sport.
Despite having once worked there, I am no great supporter of the City. However, even if the BBA hyperbole were true, are we really saying that the main foundation of London’s position as the No 1 financial centre is largely dependent, not on the talent, innovation and commitment of its (mainly UK) workers and executives, and on its expertise, infrastructure and institutions, but on a few (mainly US) non-doms and the tax breaks given to them? The same type of people whose most recent triumphs involve advancing mortgages to people unable to repay them, then packaging, concealing and peddling them as securities around the world? The type of US ex-pat financial expertise responsible for the Enrons of this world is I think something the City can rather do without. If the BBA statement is true, is not the logical conclusion that we might as well give up, become a fully-fledged tax haven and compete on what the BBA believes to be our main strengths?
Frankly as a Brit, I find the BBA comment offensive. What does the BBA think the population of the UK is – a bunch of grunts?
I think you might be shooting a little low as to the total number of non-doms who would leave. Greece has decided to try and attract Greek Nationals in the UK back to Greece. Even so, you are right that it is a small number.
Of more interest I think is the number of UK Citizens who are leaving which reports estimate at 1,000 a week. The lost taxes are probably much more damaging in that case since they were paying tax before. I know there has been calls on this site to tax UK citizens regardless of where they live, like the US does, but the US does example a good portion of the foreign income, taxing only the difference that was already paid to the State that the person is living in.