Tuesday, March 09, 2010

City brokers aren't leaving after all

We've heard so often how "uncompetitive" taxes on financial sector bonuses and so on would destroy the countries that implemented them. And we've seen plenty of evidence that it ain't so. Well, Britain's Times newspaper has the latest:

"The interdealer broker Tullett Prebon (whose front entrance pictured) led the Square Mile’s revolt over the Treasury’s plans for a one-off bonus levy and a 50 per cent rate of income tax announced in December. Terry Smith, chief executive, said that the broker would be offering its 950 UK staff the option of relocating to less onerous offshore tax jurisdications, such as Geneva and Zurich.

Mr Smith said at the time that Tullett was responding to requests from teams or desks of brokers who were desperate to escape the tax clampdown and had asked to work abroad. But Mr Smith said yesterday that far fewer brokers than expected were likely to take up the offer."

Britain's tax authorities have had the courage to challenge what's been going on. And they've decided that those who want to enjoy Britain's many positive attributes, need to pay their share. In other words, if you really want to leave and avoid your domestic tax responsibilities, then you must really leave.

"Several law firms contacted by The Times yesterday said that they advise clients to take their children with them, sell their UK property, resign British company directorships and even change their club memberships to international memberships to prove to the Inland Revenue that most of their life is outside the UK.

Matthew Woods, partner in wealth planning at Withers, the law firm, said: “There are quite a lot of people who haven’t taken advice and assumed that their non-dom or non-resident statuses were safe, but they may not be. “The safest thing is to sell up and move out but, in practice, very few people are going to want to do that.”"

As we've said on several occasions: you don't need to wait for agreement with other countries (though that helps.) What's required is decisive leadership.

And we're pleased to note that Lord Paul, in the context of the ongoing Ashcroft scandal, is ending his "non-dom" status.


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