Brown's City boy sell out
Is there a case for saying that Gordon Brown’s anti-avoidance policies have distorted the make-up of the City?
Brown’s crack down on tax avoidance relating to City bonuses has largely been
successful. Bonuses are now usually paid as regular income would be and taxed at
the normal rates.
But loopholes still exist in terms of city remuneration for foreign bankers.
Non-domiciliaries can take advantage of the rule whereby their income that is
earned abroad and not remitted is not taxed in the UK.
Foreign bankers can also take advantage of such rules by using dual
contracts, for work undertaken in the UK and for work undertaken abroad. HMRC
dislikes such arrangements, but might not be able to stamp them out.
Papers released last year by the Treasury indicated that city bankers are key
members of the non-domiciled class, which also includes a large number of
professional footballers.
I’d like to know what effect this apparent imbalance is having on City
recruitment. Is it now cheaper for a city firm to hire a foreign banker?
One might say the process deprives UK citizens of getting jobs where they
could learn the skills Brown says are so important to our global future.
Has Gordon sold our City boys down the river?
Alex Hawkes is Accountancy Age’s tax correspondent