London to become most expensive financial hub for bankers, report shows

10 March 2010

London is to become one of the most expensive global centres for bankers to work in after the forthcoming introduction of a revised income tax banding for high earners, new research has shown.

Findings from a study by KPMG, reported by the Wall Street Journal, revealed that many British bankers would pay more in tax than colleagues working in other financial centres such as New York, Dubai, Hong Kong and Geneva.

The research compared the amount of employee tax and social-security payments bankers would make following the introduction of the new levy.

From April 6th, UK-based bankers who earn £150,000 or over will face a 50 per cent tax on their annual salary.

Ian Hopkinson, head of people services tax at KPMG, told the Independent: "This is very stark, the facts speak for themselves. If you earn above £250,000, London goes from being very competitive to completely uncompetitive."

“Tax as an issue is now front and centre for financial services firms," he added.

The results found that London would be the most expensive for bankers earning a combined bonus and salary of £500,000.

However, Frankfurt and Paris would be the most expensive cities in which to work for bankers earning a total of £250,000 per annum.

By Jim Ottewill

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