City anger over report ignoring 50% tax
A number of business heavyweights are said to be angry that a report, commissioned by Chancellor Alistair Darling, on the competitiveness of the City doesn't address the potential impact of a new top rate of income tax.
Ignored: An Alistair Darling commissioned report fails to address the impact of the 50% tax on the City
The report, due to be published on Thursday, is expected to acknowledge the importance of having a stable tax framework, but will not refer to the 50% rate, announced by Darling in the Budget, which will hit those earning more than £150,000 a year.
Members of Darling's advisory Financial Services Global Competitiveness Group - which includes a number of City grandees like HSBC chief Michael Geoghegan and London Stock Exchange boss Dame Clara Furse - were stunned to discover the report will not address the issue.
Any admission in the report that the new tax on higher earners could damage the City's prospects would have been an embarrassing blow to the government.
Critics say the government's tax plans will spark an exodus of talent from the City to more business friendly countries.
It comes as reports said Britain is rapidly falling down the ranks of the world's tax-friendly destinations.
Figures from accountancy firm Deloitte suggest that for a business owner earning £250,000 a year, the UK will soon be more expensive than Ireland, the US, Singapore, Hong Kong and Germany, as well as Jersey and Switzerland.
Lloyds List publishing group Informa last week became the first big company to say it is shifting its tax base from London to Switzerland because of recent changes in the Budget. Others, such as United Business Media and WPP, have already moved their tax affairs to Dublin.
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