UK Finance Lobby Leaves Paris Out of Tax Report

UK Finance, the lobby group representing major lenders, excluded Paris from its latest global tax comparison ahead of next week's budget. The group's annual report, prepared by PwC, identifies London as the most tax-intensive city for banks. It calculates a total tax rate of 46.2 percent for a large bank operating in the capital. 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.

Independent calculations reviewed by an accountancy firm place the tax burden in Paris between 51.6 percent and 57.3 percent. That range sits up to 11.1 percentage points above the London rate. Paris hosts major institutions including JP Morgan, Goldman Sachs, and Barclays. UK Finance told Chancellor John Healey in a letter that raising taxes could drive business and jobs to rival centers.

The group defended the omission by stating it could not generate a comparable figure for Paris using its specific model bank. It argued that retaining the same five cities allows for consistent year-on-year comparisons. The report notes that in previous years, jurisdictions like Frankfurt had higher total tax rates than the UK.

Paul Nowak, general secretary of the Trades Union Congress, called the lobbying effort misleading. He argued that the data does not reflect the actual taxes paid by Britain's large banks. Nowak suggested these banks likely pay less than their competitors. The TUC proposed raising the bank surcharge from 3 percent to 8 percent. It estimates this change would generate 2.25 billion pounds per year.

Simon Youel of Positive Money questioned the methodology. He asked whether Paris was intentionally left out to support the claim that the City contributes more tax than any other global financial sector. Youel expressed hope that the Chancellor would follow other nations in raising bank taxes to recoup windfall profits from higher interest rates.

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

A Treasury spokesperson said tax decisions are for the Chancellor to set out at fiscal events. The department stated it does not routinely comment on proposals or speculation. PwC has been contacted for comment on the report's methodology.