Surveys

UK Financial Services Practitioners Condemn Bonus Tax - Survey

Ilya Timofeyev 7 January 2010

UK Financial Services Practitioners Condemn Bonus Tax - Survey

A survey of financial services practitioners showed that 61 per cent of them believe the 50 per cent tax on bankers’ bonuses imposed last year by UK finance minister Alistair Darling is unjustified, according to the Chartered Institute for Securities & Investment.

In his pre-budget report statement last year, Mr Darling proposed a one-off 50 per cent tax on bank bonuses over £25,000 ($40,000).

Some of the respondents to the survey think the proposed measure is “blatant electoral opportunism”, which will lead to wealth generators leaving the country in large numbers.

There are fears that the levy, combined with a new, planned top income tax rate of 50 per cent - due to take effect in April - and a levy on non-domiciled residents, will drive wealthy people out of the country, and reduce, rather than increase, tax revenues, and also damage London's standing as a financial centre.

Others said that “in the long term, talent will be driven away, London will be less competitive” and that can cost the city a place at the forefront of the financial industry.

The remaining 39 of respondents supporting the tax stated that they find it important for the industry to clean itself up.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes