UK Finance accused of cherrypicking tax data excluding Paris
Guardian-reviewed calculations put Paris's bank tax rate above London's, challenging UK Finance's claim that London is the most tax-intensive financial hub.
What you need to know
UK Finance, in a PwC-compiled report, ranked London the most tax-intensive financial hub at a 46.2% total tax rate, below New York's 27.9%, and cited this in a letter to Chancellor John Healey warning banks could shift business abroad. The TUC and Positive Money accused the group of cherrypicking by excluding Paris.
- UK Finance's report, compiled by PwC, lists London's total tax rate at 46.2%, compared with 27.9% in New York and 42.2% in Amsterdam
- The lobby group warned Healey in a letter that higher bills could prompt banks to move business and jobs to rival hubs
- Guardian calculations reviewed by an accountancy firm put Paris at 51.6% to 57.3%, above London
- UK Finance said Paris was not excluded over its tax position but that it could not produce a robust like-for-like figure using the report's model bank
- The Treasury said tax decisions are set out by the chancellor at fiscal events
What the lobby group reported
UK Finance, which represents banks including Lloyds, JP Morgan and Revolut, commissions an annual PwC-compiled report tallying the taxes borne by a large bank, including corporation tax, social security, VAT and bank-specific levies. The report lists London as the most tax-intensive city at a 46.2% total tax rate, against 42.2% in Amsterdam, 39.1% in Frankfurt, 29% in Dublin and 27.9% in New York.
The figures were pushed in a letter to Healey warning that banks could shift business and jobs to rival hubs if threatened with higher bills.
The exclusion dispute
Campaigners questioned why Paris, host to large investment banks including JP Morgan, Goldman Sachs and Barclays, has consistently been left out. Guardian calculations reviewed by a leading accountancy firm put the same bank in Paris at a total tax rate of 51.6% to 57.3%, up to 11.1 percentage points above London.
TUC general secretary Paul Nowak called the comparison a misleading attempt to argue against fair taxes. Positive Money's Simon Youel asked whether Paris was cynically omitted so the report's sponsor could claim the City contributes more tax than any other global financial sector.
UK Finance said Paris was not excluded because of its relative tax position, but that it had been unable to produce a robust like-for-like figure using the report's model bank, and that the five cities included have stayed consistent to support comparison over time. A Treasury spokesperson said tax decisions are a matter for the chancellor to set out at fiscal events.
Why was Paris left out of UK Finance's tax comparison?
UK Finance said Paris was not excluded because of its tax position, but that it could not produce a robust like-for-like figure using the report's model bank. It said the five included cities have remained consistent to support comparison over time.
Sources & context
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