From Withers LLP, tax planners to the rich’s Pre Budget report, talking about the bank payroll tax:
As drafted, the proposed legislation will catch family offices, UK investment managers of hedge funds, private equity funds and many more, not just the banks who received financial support (directly or indirectly) from the UK taxpayer. It is understood this is not necessarily the Treasury’s intention and it remains to be seen whether the scope of the legislation will be restricted and targeted at just those banks. This potential confusion is unwelcome, and it is hoped it will be reviewed properly by Parliament, particularly given the potentially wide impact of this measure.
Shurely some mistake?
Dream on Withers: I doubt it. I think it was meant to cover all those things — and good news too!
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If it was meant to catch all of those institutions then I’d guess we’ll see a lot of them moving away for the UK.
It is a long time since I had to read UK tax legislation but I had a quick look at the draft you linked to in another post. How do hedge funds, family offices etc get included? Taxable Company seems to be a bank or building society or a company in a group with one of these. Whilst this may catch some hedge funds or PE funds, I would think many are not caught. Maybe I am missing something (I have not read the full draft legislation).
John Buckles – exactly.
If it was meant to catch them, then it has been done very dishonestly. Not just using the words banks and building societies throughout, but also the ‘justification’ of hitting banks that choose not to repair their capital base. Investment managers etc. do not need to repair their capital base.
Personally I doubt it though as of the defining activities listed, investment management (a regulated activity) has been, it would seem, expressly omitted.
Shall we assume that Alastair thinks hedge funds, private equity and private offices are all intended to shift wealth from the many to the few and as such are also part of the problem?
In that case why not include them?
I think, for different reasons, virtually everyone who does not have a stake in the UK economy is hoping that the legislation is as Richard describes it. Alas, I think not.
J – the catch is in the full legislation – the definition of banking activites includes dealing as agent, and arranging deals as investments, activities which most (if not all) investment managers undertake. However it is only business that do this ‘wholly or mainly’ which is why the debate is arising.
Many pension and retirement funds invest in hedge funds, so Richard Murphy’s comment is politicised nonsense and misses the point.
And hedge funds are also included because rumour had it that banks would spin out trading desks as hedge funds
So it is sound anti=avoidance
As for politicised nonsense: political reality – pension funds are largely owned by the top 10% in the economy
No. Many US public employee retirement funds are big hedge fund investors.
Mark
So?
It does not change my factual assertion
Richard
A quote from just one well known hedge fund investor:
“We provide retirement, health, and related financial programs and benefits to more than 1.6 million public employees, retirees, and their families and more than 2,500 public employers.”
“Fact” or otherwise, these are hardly “the wealthy few” you claim.
Mark
The vast majority of whom will have tiny pensions and a few of whom will have good ones
You have proven nothing
Richard
Neither have you.
At the moment, a quarter of all the money spent on pensions tax relief goes to the top 1 ¬? per cent of earners.
Alastair darling, yesterday
Yes I have made my point