There is hardly a day goes by when we do not hear a story about someone who is threatening to leave the UK because of our tax regime. Indeed,there was one this weekend in the Sunday Times, stating that bankers are now reluctant to come to the UK,and our best talent is leaving.
But the Observer has another slant on the story. As it notes:
Despite all the frustration expressed in public, evidence of an exodus of top-flight executives is all anecdotal. A report published yesterday (Saturday) by the Corporation of London named just a handful of insurance companies and hedge funds that have left the UK. Insurers Kiln, Hiscox, Beazley and Brit have moved their tax bases away from the UK, and three hedge funds – Blue Crest, Brevan Howard and Moore Capital – have moved to Switzerland. Traditional fund manager Henderson has relocated to the Netherlands.
There is also hard evidence that others are committing to the City. Swiss bank UBS has commissioned new offices in London while Japanese bank Nomura, now a major presence after buying much of the European operations of Lehman Brothers after its collapse, has just moved into new premises in the heart of the City. Wall Street bank JP Morgan is also deciding whether to set up shop in Canary Wharf.
Highly paid individuals appear to be staying in London despite promises from their employers to make it easy for them to leave for lower-tax regimes. A pledge by Terry Smith, chief executive of money broker Tullett Prebon, to allow staff to move overseas does not appear to have been taken up. High taxes or no, London is still their residence of choice, at least for now.
If that is an exodus,I am Bulgarian (and there is not a hint of it that I know of anywhere in my family).
This means three things. First there is an awful lot of what might the likely be called misinformation pouring out of the mouths of bankers and most especially accountants on this issue.
Second, the claims of significant tax loss are clearly vastly exaggerated. In fact,it is of course the case that we can afford to lose a few who objects to higher taxes in the UK when the vast majority (which looks to be about 99.99%) except that higher charge.
Third, the continuing claims (and there were a host of them noted in the Observer story) but people will leave have exactly the same status as past threats: that is,they are all a load of rubbish.