City tax data: Paris left out of bank lobby report

UK Finance has published a new report asserting that London carries the highest total tax burden among major global financial hubs. The document was released to inform the government’s upcoming budget decisions. The association represents major institutions including Lloyds, JP Morgan, and Revolut.

The analysis was produced by the accountancy firm PwC. It calculates the aggregate tax liability for a standardized large bank. The metric combines corporation tax, social security contributions, VAT, and specific banking levies. London’s total rate stands at 46.2 percent. 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.

UK Finance sent a letter to Chancellor John Healey citing these numbers. The group argues that further tax increases could prompt banks to relocate operations to competing centers. However, the report excludes Paris from the comparison. Paris is a direct rival to London and hosts major investment banks such as JP Morgan, Goldman Sachs, and Barclays.

Independent calculations reviewed by an accountancy firm suggest 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 stated it considered including Paris but could not generate a comparable figure using its specific model bank. The group argues that maintaining the same five cities allows for consistent longitudinal comparison.

Paul Nowak, general secretary of the Trades Union Congress, criticized the omission. He described the lobbying effort as misleading. Nowak stated that the data does not reflect the actual taxes paid by Britain’s big banks. He believes these taxes are likely lower than those paid by competitors in other jurisdictions.

Simon Youel, head of policy at Positive Money, questioned the methodology. He asked whether Paris was left out to support the claim that the City contributes more tax than any other sector. Youel expressed hope that the Chancellor would follow other nations in raising bank taxes to recoup windfall profits from higher interest rates. The TUC has proposed increasing the bank surcharge from 3 percent to 8 percent. This change would raise 2.25 billion pounds annually.

Banking leaders have offered mixed reactions to potential tax hikes. CS Venkatakrishnan, chief executive of Barclays, told journalists on Thursday that the financial impact would be bearable. He gave the Chancellor his full support. In contrast, Jamie Dimon, head of JP Morgan, warned in May that the bank could scrap plans for a new 3 billion pound London headquarters if the regulatory environment became hostile. Dimon met with Andy Burnham and Healey last month to discuss the risks to investment and jobs.

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