Super tax is threat to London warns Mayor

| January 15, 2010 | 0 Comments
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London Mayor, Boris Johnson, has warned that high-earning bankers are leaving the capital because of the super tax which has been introduced by the Government.

In the recent Pre-Budget Report (PBR), UK Chancellor Alistair Darling confirmed there would be a one-off 50% tax on bankers’ bonuses paid above £25,000.

The Chancellor said the banks, rather than the bankers, will pay the tax and it will be used to claw back some of the bailout funds used to rescue the banking industry.

At the time of the PBR, Barclays chief John Varley said that London may be “damaged” by the new bonus tax.

As a result, Mr Johnson has written to the Chancellor requesting an urgent meeting to discuss how to reverse “the damage done to perceptions of London as a global financial centre” by the introduction of the super tax.

The letter states: “You have made unilateral changes to taxation that risk damaging London’s competitiveness and its status, alongside New York, as the world’s leading financial services centre.

“London becomes a less attractive destination for the globe-trotting, highly-skilled business men and women who can contribute greatly to our economy.”

According to the Mayor, approximately 9,000 bankers could flee the capital and said his “ aim is to maintain London’s reputation as the number one business destination, and I am looking to Government to help, not hinder, that goal.”

The warning comes just a day after US President Barack Obama pledged to repay taxpayers the losses they are owed from bailing out the banks as he criticised bankers for the “massive profits and obscene bonuses.”

The President said: “My commitment is to recover every single dime the American people are owed.”

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