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New non-doms tax ‘threatens to topple the City’
Paul Waugh, Deputy Political Editor29.02.08
The collapse of Northern Rock and the tax crackdown on foreign “non-doms” is allowing New York to overtake London as the world's financial capital, a report warns today.
A global survey of finance chiefs commissioned by the City of London Corporation found Britain is becoming less attractive to overseas business.
In a further blow, Harvey Nichols said it was poised for a drop in sales because wealthy foreigners were preparing to quit the country over the £30,000 levy the Government will make
them pay from April.
Yesterday was the last day for submissions to the Treasury on the plan to charge non-doms. Under Chancellor Alistair Darling's proposals, they will
have to pay £30,000 a year if they want their overseas income to remain outside the British tax net.
Many Asian, Greek and Russian millionaires are said to be considering moving to Switzerland and elsewhere to avoid the levy. City leaders have
already warned that the proposals, which also include a crackdown on offshore trusts, will provoke an exodus of foreign investors and professionals who have contributed to London's pre-eminence as a financial centre.
High-end stores such as Harvey Nichols depend on big-spending customers such as these for their success, Retail Week magazine reported.
The worldwide survey is called the Global Financial Services Index and is compiled from questionnaires completed by 1,200 financial services workers.
Cities are rated on property costs, regulation, tax, skilled staff, responsiveness of government to business needs, and quality of life. When all
responses since the start of the survey 18 months ago are counted, London remains the leading financial centre, with 795 points to New York's 786.
But when only the 411 responses received since September are taken into account, New York scores
46 points higher than London.
Offshore centres such as Jersey and Guernsey had become more competitive, as had Shanghai, Dubai, Qatar and Bahrain, the poll found.
Another survey, also commissioned by the City, found business leaders in London believed the British tax system had lost its competitive edge
because it was increasingly unpredictable, complex and aggressive against the wealthy.
Ireland, Switzerland, the Netherlands, Bermuda and Singapore were judged to be more attractive.
Reader views (6)
Is this really that much of a bad thing? If these multi millionaires are that concerned about paying £30,000 in tax a year do we really want or need any of them over here?
- Simon Payton, London, UK
Why is it we seem to be sliding down the pan ever since Tony left - wasn't Gordon supposed to be the savvy one with his feet firmly on the ground? Or have now got pepper without salt, cold without hot, sensibility without sense?
- Margaux, London
The ' millionaires ' will not move away from London -the most exciting city in the world -even when they have to pay a bit more in taxes . The alternative countries with low taxes in Europe and elsewhere apart from New York City are simply too boring to live in.
- Jonathan, Berlin, Germany
Thanks to Brown and Darling of course!
- Tom, St. Albans
Have I read this right? Millionaires are leaving the country because they are to be charged £30k for living here. Seems a good deal. Bye bye.
- Mr S. Port, London
The UK is stuffed. In recent conversations in New York with wealthy ship owning families they had already decided to sell up and go. The 30,000 raid by NuLabor is irrelevant. It is the invasive and intrusive trawling for offshore non-UK assets etc that has them concerned. NuLabor will create a crisis of confidence in the City of London that will do long lasting damage. Cameron is utterly useless and will not win the next election outright, instead the UK will have a hung Parliament with a LibLab coalition, even worse than NuLabor. Really very depressing and emigration of the wealthy and skilled will really rocket. So depressingly unnecessary and destructive.
- James, New Malden, Surrey
