The anticipated exodus of many bankers and finance professionals from the UK may be prevented by a tax ruling against a British entrepreneur, a broker has claimed.
Terry Smith, chief executive officer (CEO) at Tullet Prebon, told the UK’s Times newspaper that the company had offered its workforce the opportunity to escape new tax legislation via opportunities in Geneva and Zurich.
However, less staff than anticipated had agreed to take up the invitation, which the CEO blamed on a legal battle between entrepreneur Robert Gaines-Cooper and the UK’s tax authority HM Revenue & Customs (HMRC).
A recent ruling by the Court of Appeal stipulated that Mr Gaines-Cooper would need to pay UK taxes as, despite spending less than 91 days a year in the UK, “the centre of gravity of his life and interests” is still located there.
Mr Smith told the news provider that the ruling means the company does not anticipate many of its staff taking up the offer of working abroad.
“[They] don’t know now whether even coming back on a client visit would mean they would qualify as residents. I wouldn’t say that it’s not possible but it’s less feasible than it was before,” he explained to the Times.
The invitation followed an announcement by chancellor of the exchequer Alistair Darling in his pre-Budget report that a new 50 per cent tax is to be levied on all banker bonuses above £25,000.
Mr Darling had also unveiled plans to raise the top rate of income tax to 50 per cent.
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