UK Finance tax report accused of leaving Paris out of 'London most taxed city' claim
UK Finance, the banking lobby group behind a PwC report naming London as the most tax-intensive city for banks, has been accused of cherrypicking data after it emerged that Paris is consistently left out of the city comparison.
UK Finance tax report accused of leaving Paris out of 'London most taxed city' claim
The report behind the 'London most taxed city' claim
Each year, UK Finance - the banking lobby group whose members include Lloyds, JP Morgan and Revolut - commissions a study tallying all the taxes shouldered by a large model bank. Compiled by PwC, it counts corporation tax, social security, VAT and bank-specific levies.
The latest edition names London the most tax-intensive city, with a "total tax rate" of 46.2%. The cities stacked against it, and their rates, are:
- Amsterdam: 42.2%
- Frankfurt: 39.1%
- Dublin: 29%
- New York: 27.9%
UK Finance has circulated the figures, including in a letter to Chancellor John Healey warning that banks could shift business and jobs to rival hubs if their tax bills rise.
Why Paris is missing
Paris, one of London's biggest rival financial hubs and home to major investment banks including JP Morgan, Goldman Sachs and Barclays, has consistently been left out of the city comparisons. Guardian calculations reviewed by a leading accountancy firm put a bank's total tax rate in Paris at between 51.6% and 57.3% - up to 11.1 percentage points above London.
UK Finance said it had considered including Paris but was not able to produce a "robust like-for-like figure using the report's model bank". It added that "Paris has not been excluded because of its relative tax position", and that the five cities included have stayed consistent to allow comparison over time.
The accusation from tax campaigners
TUC general secretary Paul Nowak said the finance lobby was cherrypicking jurisdictions in a misleading attempt to argue against fair taxes, and that the comparison says nothing about what Britain's big banks actually pay, which is likely far lower than many competitors.
Positive Money's Simon Youel said the "conspicuous absence of Paris" raises wider questions about the report's methodology.
This raises the question of whether Paris was cynically omitted to allow the report's sponsor, UK Finance
Youel was hopeful that John Healey would see through City lobbyists and follow other countries in raising bank taxes to claw back windfalls from higher interest rates.
What the sector says
UK Finance has defended the report, noting that previous editions showed jurisdictions such as Frankfurt with higher total tax rates than the UK at the time. PwC, which compiled the study, has been contacted for comment.
