Bankers Omit Paris From Tax Data

UK Finance has excluded Paris from its latest global tax comparison, a move that has drawn scrutiny ahead of the upcoming UK budget.

The industry body, which includes Lloyds, JP Morgan, and Revolut, relies on a report from PwC to argue that London imposes a total tax rate of 46.2 percent on large banks. This figure exceeds the rates in Amsterdam at 42.2 percent, Frankfurt at 39.1 percent, Dublin at 29 percent, and New York at 27.9 percent.

The calculation combines corporation tax, social security, VAT, and bank levies. UK Finance sent a letter to Chancellor John Healey using these numbers to warn that higher taxes could drive business and jobs to other financial centers.

Paris is missing from this list despite hosting major institutions like 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 range is up to 11.1 percentage points higher than the London rate.

UK Finance said it could not produce a comparable figure for Paris using its specific model bank. The group maintains that retaining the same five cities allows for consistent year-on-year tracking. It noted that previous editions of the report showed other jurisdictions with higher rates than the UK at the time.

Critics argue the omission helps banks protect profits. Paul Nowak, general secretary of the Trades Union Congress, called the lobbying effort misleading. He stated that the data likely understates the tax burden of major competitors. The TUC proposes raising the bank surcharge from 3 percent to 8 percent, a change that would generate 2.25 billion pounds annually.

Simon Youel of Positive Money questioned whether Paris was left out to support the claim that the City contributes more tax than any other sector. Banking leaders have offered mixed responses to the debate. Jamie Dimon of JP Morgan warned in May that a new 3 billion pound London headquarters could be scrapped if Britain became hostile. CS Venkatakrishnan of Barclays told journalists on Thursday that the financial impact of a tax rise would be bearable and backed the Chancellor.

A Treasury spokesperson said tax decisions remain for the Chancellor to outline at fiscal events. The department added that it does not routinely comment on proposals. PwC has been contacted for comment on the report's methodology.