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London's £1 million a year earners will become the worst off in the world when the 50 per cent rate of income tax is introduced from 6 April.
A City banker on £1 million will take home £300,000 less than his equivalent in Singapore and £73,000 less than a similar earner in Zurich, according to calculations by tax experts at KPMG.
“People feel let down,” Nick Bacon, tax partner at the accounting firm said. “They thought the UK could always be relied on as tax friendly.”
Until the April tax rise Londoners on £1 million paid less tax than most of the rival financial centres except Hong Kong, Singapore, Tokyo and Dubai.
Many City firms are looking at offering their staff the chance to move to overseas offices.
Terry Smith's broking firm Tullett Prebon will allow entire desks of traders to relocate to Geneva and Singapore so long as they all agree to the move.
Mayor Boris Johnson claimed this week that up to 9,000 bankers could quit the capital because of the new tax regime.
KPMG's Mr Bacon said Britain's highest income tax rate would be more than that of France or Germany for the first time since 1989.
This year London's £1 million earners will pay less tax than those in Frankfurt, Paris, Mumbai, New York or Zurich. But for 2011 London shoots to the top of the tax table.
“The very serious earners in London will be taking a hammering,” Mr Bacon said. “But for more mortal people in the City, those on £250,000, which is still a pretty hefty amount, the difference between London and its rival financial centres will not be so great.”
Tax for those earning £250,000 in London will rise from just over £96,000 this year to almost £109,000 but in terms of ranking against other financial centres the capital only moves up from fifth to fourth place.
Once the higher rate of tax is applied for a full year there is only £14,000 difference between the tax paid in Frankfurt at £116,000 and New York at £102,000.
Mr Bacon also pointed out that many of London's highest financial services earners were still registered as non-domiciles. He said: “Even after the changes to their treatment, London is still a fairly benevolent regime for them.”
Reader views (32)
The Bankers and Traders are not responsible for the mess of the economy. Its the people that took out 110% mortgages, racked up credit card debts they could not afford to pay back, car loans etc etc. The list goes on. So before we blame the people that earn a decent salary and lived within their salaries have a long look at yoursleves. How did you think you were going to pay back a debt you incurred? Oh! yes, the bankers and traders fault.
You people make me laugh. There is a program on Tv at the moment and the saying is " Dont hate me because you arn't me"
Can't chat here......best go and sit by the pool with a cool glass of pimms.
- Nicky, Singapore, 16/01/2010 03:57
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The traders and bankers are the one's responsible for the mess this country is in, the collapse of banks, the artificially inflated house prices and share prices. Strip clubs are aguably oppression of women, and the pollution of the earth is contributed by greed.
The 50% tax bracket is a just and well overdue - You can live on £200 k a year easily - many get by on a joint £50k Income. If you dont like the tax bracket - relocate to Switzerland, and if your happy here - then pay and stay. Simple answer to simple 'problem'
- Ancient Wisdom, London, England, 15/01/2010 16:16
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Well put Tony the Trader. This government want us all to work down to the lowest common denominator. Success is frowned upon except of course for members of the Labour government who all seam to be doing very nicely thank you and no doubt some join banks and earn even more sums of money and will also move abroad on the advice of their tax advisors.
- Strongbow Sullivan, Paris, France, 15/01/2010 08:58
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The City has become what it is thanks to foreign banks moving to London for tax reasons only. Now that it doesn't make sense for these people to live in London (where they don't get anything whatsoever, no schools for their children, no proper medical assistance, no decent public transport, etc but pay very high taxes and the standard of living are not as good as, say, in Geneva) they will return "home" and London will no longer be the world's premier financial centre.
The "funny" thing is that all these people are working for banks that didn't need to be bailed out by the taxpayer. In a nutshell the result of this new "bankers bashing policy" will be that all the good apples will flee London and the bad apples will stay put (no other government would have saved a basking case like RBS, for example). Nice!
- Paolo, Milan, 15/01/2010 08:43
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Tony the trader I totally agree with you
- Michael, Cheshunt, 15/01/2010 05:26
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My husband is a banker and we left London for him to take up a position in Singapore. Its been the best thing that we ahve done. We pay less tax and enjoy TEN holidays a year. Something we could not do in the UK. He works 14 hours a day and its a long day. He has not got a 8 hour day and so he gets paid for his long, long days.But we not taxed to death for earning a decent wage.
But for all the Bnaker bashers..........NOT ALL banks had to get goverment hand outs. But been Daily Mail readers you would lump all the banks togethr.
For all the Bankers that are thinking of moving to Singapore you won't regret it. Its hot but there is air con etc etc. Life for your wife and kids are wonderful as well. And you can save the extra tax for your pension as there will be nothing in the pot in 10 yrs time.
Cheers.
- Nicky, Singapore, 15/01/2010 04:26
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Its been the disgraceful bonuses that have contributed to the recession.Gambling with money that does,nt belong to you and then being rewarded for failure! I see them on a daily basis,free lunches,hard drinking during & after working hours,i mean £60 bottles of champagne every day! Expenses paid & luncheon vouchers,chauffers,taxi expenses,hotel expenses.Now that is nothing to do with providing for your family,most of us take a packed lunch,& pay for our own transport to work! Goodbye bankers,you,ll not be missed!
- David The Grafter, East London, 15/01/2010 00:11
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Tony, the trader - Your socially useless job did not warrant the sort of pay to enable you to pay for ten nurses in the first place. Everyone who works in investment banking knows that traders are glorified gamblers who are the bottom of the pile because they lack intellectual rigour which was why barrow boys could do the job. So perhaps you are better off leaving investment banking to go back to Borough market or William Hill - you'll see how much you are really worth.
- Liz, London, 14/01/2010 22:38
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Surely even Brown and Darling can understand that driving the big earners away the country lose out on their PAYE, National Insurance, VAT on spending, tax on domestic staff, petrol tax and other forms of tax on the earnings of their employers. Maybe not, they are so stupid.
- Michael, London, UK, 14/01/2010 20:42
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But where else would the 'high flyers' go?
Not all can go to HK/Sing etc. Dubai RIP!
EU taxes are getting higher and other places 0000's of miles from home.
- Tim S, Malaga, Spain., 14/01/2010 20:37
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There are 1,000 dying in Haiti and we are being asked to feel sorry for some bankers who are going to be charged more in tax - it's a bit sick really
What I do find interesting and which the London media is not reporting is that American Banks are also pulling the same blackmail on the US Govt saying "we must be able to pay bankers or they will all leave"
I have started getting visions of a roaming herd of bankers moving around the world changing countries every six months as each country brings in a new bank tax to reign them in. Soon there will be no place left for them to go unless they want to head out to space!
- Small Gray Cat, Chiswick, 14/01/2010 20:02
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Having lived in Zurich for several years and spent several months in Singapore I am more than happy to pay my taxes and enjoy the UK.
Good luck to those thinking of going to Zurich. Be warned if you want to pay low tax - you'll have to live down the lake in the middle of nowhere. My colleagues who live there liken it to working on an oil rig. You can live around the 'gold coast' as I did but tax will be a lot higher and the place is still dead (i admit it was a pretty place to live). It's foggy and gloomier than the UK for most of the winter. The shops are never open and you'll soon be missing Waitrose. There's a reason you go to the mountains at the weekend. There's nothing else to do.
Feel free to go. If you want to live in a country that allows the SVP's Black Sheep campaign then that is your choice.
And as for Singapore... you wont find a more sterile (and humid) place in the world. Like living in the Bluewater shopping centre in the middle of summer with the air conditioning broken.
So the trade is 'singapore or zurich v London'? Yours!!!!
- Investment Banker (Uk Tax Payer And Proud Of It), London, 14/01/2010 18:56
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Tony the Trader. Do it, mate. I work for a hedge fund (I'm not a high earner by trader standards but have a decent income) and I moved to NY 2 years ago. The amount of tax I pay is more or less the same, but the public hatred of anyone that does well for themselves is not the same. The UK is still a great country, but this bitter jealousy that everyone seems to be consumed by is ruining it. Everything you have said there is true.
- Paul, New York, 14/01/2010 18:45
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Tony trader,
So you don't use the NHS or state education. Bully for you.
What I want to know is how much your bank had to borrow from us mug taxpayers to keep yopu in a job, when are we getting it back, and at what rate of interest. Also why weren't the banks allowed to go bust like every other company would have been.
Thats what capitalism's about isn't it ?
- Dave, london, 14/01/2010 17:38
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So Mickinlondon,Dave,David et al...
What happens to all of the tax (at 40% + NI) that will be lost when these people go? Easily replaced David says, but that just shows he hasn't a clue.. They are not just going, they're taking their jobs with them. That means (for David) that the jobs are no longer required in London and the tax they pay goes with them.
Can you lot make up the difference with your tax?
I'm not working in banking but even I can see that we are going to lose a world leading industry because we feel the need to shot ourselves in the foot.
I remember a few years ago, the local Council / Police on the island of rhodes, came down hard on british holidays makers saying they didn't want scum like that on their island. So next year and the year after no one went. Business went bust and people lost jobs. They then had to grovel to try and get them back....
- Mark, St Albans, 14/01/2010 17:11
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That lot don't know they are living,this is the real world my friends.
- Davey_Bouy, Chertsey, 14/01/2010 16:46
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It's a shame that Brown's "class war" policy is resulting in hatred of success and the bile ridden outpurings you see here. He is deliberately turning Englishman against Englishman to save his own skin. Jealous bitter people tend to vote labour.
"Look at that guy with his nice house, his nice car, his pretty wife, and his three holidays a year. You should hate him, as you don't have them and you never will".
Greed is NOT good, but striving for personal success and security for your family should be applauded. There is nothing wrong with bettering your lot in life.
It's people like me who pay for the NHS (which we never use as we pay more again for private healthcare so that we actaully get care when we need it), schools (which we never use as we pay again for private education because our scholl are rammed with louts) and benefits (which we never use because we pay our own way).
I won't apologise for having a nice life and for providing one for my family, because I worked very hard to achieve it. Every single penny I have I have earned. O levels, A levels, degree from a decent university, three years of postgraduate study, and then year upon year upon year of professional exams.
The UK has become a sick society. I will miss the place it used to be, but not the place it is now.
- Tony The Trader, Canary Wharf, 14/01/2010 16:43
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People wouldn't mind these guys being paid so much if they were actually contributing to our economy but are they? In the old days Merchant Banking was a gentlemanly business in which people with sound business ideas were loaned money and the business's flourished. Now it is more likely a bunch of champagne swigging chancers who push money around the globe but nothing is produced nor jobs created by that, only enrichment of the bankers themselves. It's a crisis of capitalism which needs urgently sorting out.
- Jon Kent, Hertford. UK, 14/01/2010 16:25
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Tony,Rr trader,and City Girl,goodbye,enjoy your flights.
- Terrence, London, 14/01/2010 16:19
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I am not a banker and not a high earner but I realise that the 'let they go attitude' is just insane. It's not just the bankers who are going it's the job that will be going with them. In short we will now get no tax revenue from any jobs that are moved abroad and therefore there will be less money going into the tax pot.
The only time I would be happy for Britain to increase tax on bankers bonuses is if the rest of the world followed suit.
- Mel, london, 14/01/2010 16:16
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The banking industry nearly collapsed in 2008 and had to be propped up by the taxpayer. Yet the bank senior management now conveniently forget this and carry on as though nothing has changed. Until the government takes decisive action to stop the banks gambling with our money the same mess could easily be repeated. So if the banks want to move overseas let them go - it reduces the risk of another open cheque from the taxpayer having to be written.
- Simon Ellis, London, 14/01/2010 16:11
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I get up at 5.30am every morning and have been at my desk by 6.30am every morning for the last 16 years. I sometimes finish at 5.00pm but I'm usually out with clients until 10.00pm a few nights a week. Stop the banker bashing and let us get on with our jobs. If we leave who will sort out the mess the minority of anyone working in the City created???? The majority of us do a good job and have good work ethics but I'll be blowed if I'm paying half my bonus to the tax man!! See you later UK, it's been emotional.
- City Girl, London, 14/01/2010 16:01
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Oh well, let them leave, they are easily replaced.
- David, London, 14/01/2010 15:55
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Although I think bankers worldwide get paid too much it's very naive to think there will be no negative consequences if high earners leave the UK. The UK will become unattractive to high earners, especially those immigrants who work in the city and pay a substantial amount of tax to our society. You know the immigrants that the daily mail NEVER write about.
- Mel, london, 14/01/2010 15:36
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The amount of monet bankers get paid is correlated to the amount of time they work, which is 24/7..They miss birthdays, kids palys and sports days, because its not just a job. Guess what to get paid £1mil p.a you dont have a smoke break at 10 and bunk of at 4pm!!!!
- Andrew, London, 14/01/2010 15:28
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A point to ponder which continually is overlooked It was Joe public which bailed out the banks.The grasping greed is breathtaking.At least you cant take it with you.
- Fred Theshred, UKI, 14/01/2010 15:28
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Tony Trader - same here.
A few years abroad will save me enough in tax to fund my pension now these tax changes are kicking in.
why stay here. If I misss it I can fly in, whenI return to live I'll be even better off than
now.
- Rr Trader, London, 14/01/2010 15:26
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Tony, It's not that anyone minds anyone being paid for hard work it's just why do we need to constantly hear about it? No one else moans quite like a banker and why you are moaning so much is beyond most people - you get a good pay, why not just leave it at that? If you want to go, go - but again, please don't tell everyone about it like a spoilt brat because really, it's quite boring for the rest of us.
- Ken Joralemon, London, UK, 14/01/2010 15:24
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Oh my goodness. My heart goes out to these "poor" traders and bankers. How hard it must be to lose the odd million to the taxman. Most people are never likely to earn a fraction if that in a year. Why do these upstarts believe it's their right to earn such stupid sums of money? I have a suggestion to make to all of them. Let them keep their millions, just let them work as a fireman, male nurse or policeman in an inner city for 12 months at the rate of pay these hard working people earn. Maybe then they will appreciate what real work is - they haven't a clue; the sooner they leave these shores the better.
- David Griffiths, Llanfyllin, Wales, 14/01/2010 15:20
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O my heart bleeds for them,how will they survive.What about the slave workers around the minimum pay level that are having to pay more in NI,the rich fat cats make me sick.
- Dave, london, 14/01/2010 15:17
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If they were on the minimum wage I would feel sorry for them, if they were on the National Average wage, I would think they were paid the correct rate, but these people would still go home with half a million at the worst, after tax paid etc, so why are they still crying about unfairness, and demanding equality with other countries whose banking cry babies are getting more sweets than they are.
Get rid of them all, and rebuild this country from scratch; with honest real people that would appreciate a better than average living standard and salary etc.
I don’t know about the rest of you; but I am sick and tired of bent bankers, and even sicker of bent politicians.
The UK needs people with honesty, integrity, self respect, and moral backbones, not a lot more wimps that cry mummy, or foul, when they do not get all their sweeties, or their own way.
To the greedy selfish Bankers and MPs; I say, stop threatening us all; be brave and just leave the country as fast and as quietly as you can; we will not miss a single one of you; and that is for sure.
Call our bluff you Bankers and MPs, I challenge you all to leave, and leave today.
But we all know you will not; as you haven't got the guts to carry out your childish threats on real men and real women.
- Mickinlondon, london, 14/01/2010 14:12
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Politics of envy.
I paid enough tax last year to pay for ten nurses. If people like me leave, where do you think that money will come from?
In the US, if you have a nice car people stop you in the street and say "how did you get that?" In this country, they spit at you and shout "why should you have that?"
Time to leave.
- Tony The Trader, Canary Wharf, 14/01/2010 13:59
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