Banking Lobby: Paris Tax Data Missing

UK Finance, the industry body representing Lloyds, JP Morgan, and Revolut, claims London carries the heaviest tax burden among global financial centers. The group’s annual report, prepared by PwC, calculates a total tax rate of 46.2 percent for large banks operating in the City. This figure exceeds rates in Amsterdam at 42.2 percent, Frankfurt at 39.1 percent, Dublin at 29 percent, and New York at 27.9 percent. The lobbying group sent a letter to Chancellor John Healey using these figures to argue against a tax increase in next week's budget.

The comparison excludes Paris, a major rival to London that hosts investment banks including Goldman Sachs and Barclays. Independent calculations reviewed by an accountancy firm estimate that a bank in Paris faces a total tax rate between 51.6 percent and 57.3 percent. This places the French capital up to 11.1 percentage points above the London rate cited by the lobby.

UK Finance stated it considered adding Paris but could not generate a comparable figure using its specific model bank. The group argued that retaining the original five cities allows for consistent year-over-year comparisons. It noted that previous reports showed jurisdictions like Frankfurt having higher total tax rates than the UK in earlier years.

Critics argue the omission weakens the lobby’s case. Paul Nowak, general secretary of the Trades Union Congress, described the data as a misleading attempt to argue against fair taxation. He stated that the figures do not reflect the actual taxes paid by Britain’s big banks. Simon Youel, head of policy at Positive Money, questioned whether Paris was left out to help the group claim the City contributes more tax than any other sector.

Banking leaders have offered mixed reactions. CS Venkatakrishnan, chief executive of Barclays, told journalists on Thursday that the financial impact of a tax rise is bearable and supported the Chancellor. In May, Jamie Dimon, head of JP Morgan, warned the bank could scrap plans for a new 3 billion pound London headquarters if Britain became hostile to the industry. Dimon met with Healey and Andy Burnham last month to warn that further levies could put investment at risk.

The TUC has proposed raising the bank surcharge from 3 percent to 8 percent, which would generate 2.25 billion pounds annually. A Treasury spokesperson said tax decisions are for the Chancellor to set out at fiscal events and that the department does not routinely comment on proposals. PwC has been contacted for comment on the report's methodology.