A leading Treasury adviser has warned the Government’s 'ill-conceived' plans for a crackdown on non-domiciled UK taxpayers are likely to damage London's standing as the world's leading global financial centre.
Bob Wigley, chairman of Merrill Lynch Europe, Middle East and Africa, added his voice to rising criticism of the proposal, which would levy an annual £30,000 on taxpayers who want to avoid UK tax on foreign income which is kept outside Britain – and cut their use of offshore vehicles for avoiding tax.
UK-domiciled Wigley, who is a member of Chancellor Alistair Darling’s group of ‘wise men’ who advise on keeping London competitive, told the Sunday Times: 'This proposal was ill-conceived from the start. While it clearly has some political attraction, the economic case is flawed.'
'These measures were partly aimed at the non-domiciled billionaires. They could, if not withdrawn or substantially amended, drive offshore young upcoming talent that currently chooses to live in London, so making London the leading global financial centre.'
He added: 'When you consider that most of those who could be driven away probably don’t use the state education or health systems but spend a lot of their above-average incomes here, so contributing disproportionately to Vat receipts, these are exactly the good-value taxpayers London should want to retain.'
According to Treasury calculations, the planned tax will raise £800m in 2009-10 and £500m in 2010-11.
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