50% rate will make London the tax capital of the world

By
Lucy Farndon
Last updated at 12:05 AM on 09th March 2010

London will become the most highly taxed financial centre in the world when the new 50 per cent income tax rate for those earning £150,000 or more comes into force next month. Taxes will be higher than for financial workers living in the other key centres of New York, Paris, Frankfurt, Geneva, Zurich, Dubai and Hong Kong, KPMG calculated. The findings will raise fears that Labour’s levies are driving businesses and bankers overseas and threatening Britain’s competitiveness.
Exodus: There are fears that Labour’s new 50 per cent income tax rate for those earning £150,000 or more, will drive businesses and bankers overseas
Warning: Tullett Prebon chief executive Terry Smith says slapping further taxes on workers will only hinder the economyTerry Smith, chief executive of broker Tullett Prebon, warned yesterday that increasing taxes on workers and companies would only hinder the economic recovery.

He also accused Labour of ‘criminal negligence‘ by racking up a budget deficit in the boom times rather than saving money for a rainy day. ‘The UK economy is an utter disaster on any number of fronts,’ Mr Smith said. Tullett announced last December that it will help employees move abroad if they want to avoid the top rate of tax, and Mr Smith said workers are already looking at relocating. Graeme Leach of the Institute of Directors said: ‘The 50 per cent rate is a policy that should never have been announced. The indirect impact on entrepreneurial aspiration, business confidence and foreign investment is likely to be significant. ‘We suspect that little or no money will be raised and we urge the next government to reverse the increase as soon as possible.’ Labour’s windfall tax on city bonuses has also led to anger in the City. That imposes a 50 per cent one-off charge on the banks themselves for any bonus that they pay out in excess of £25,000. However the banks have not changed their behaviour. They are still handing out multi-million pound packages, but are forcing shareholders to pay for the levy, rather than risk annoying their top traders by taking it out of the bonus pool. Tax minister Stephen Timms denied last week that the higher rate would harm the UK. He said: ‘It affects one per cent of the population. It is right that those with the broadest shoulders bear their share of responsibility during the consolidation.’ London today ranks sixth out of the eight key financial centres, in terms of the tax burden for high earners. But when the new rate comes into force the UK jumps to the top of the list with the most onerous tax burden for any worker earning £500,000 or more.

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London to become most highly-taxed finance centre in world as business is driven overseas

By
Lucy Farndon
Last updated at 10:23 PM on 08th March 2010

London will become the most highly taxed financial centre in the world when the new 50 per cent income tax rate for those earning £150,000 or more comes into force next month.The findings will raise fears that Labour’s levies are driving businesses and bankers overseas and threatening our competitiveness.From next month onwards, financial workers will pay more in personal tax and social security than they would if they were located in any other major financial centre.
Exodus: There are fears that Labour’s new 50 per cent income tax rate for those earning £150,000 or more, will drive businesses and bankers overseas
Taxes will be higher than for workers living in New York, Paris, Frankfurt, Geneva, Zurich, Dubai and Hong Kong, KPMG calculated.It gives further ammunition to City firms, who have been moaning for months about the rising tax burden.Today, Terry Smith chief executive of broker Tullett Prebon, warned that slapping further taxes on workers and companies will only hinder the economic recovery.He accused Labour of ‘criminal negligence‘ by racking up a budget deficit in the boom times rather than saving money for a rainy day.
Warning: Tullett Prebon chief executive Terry Smith says slapping further taxes on workers will only hinder the economy
And he said he fears that there is a ‘reasonable chance of a further financial crisis’, pointing to concerns about the level of debt among some European nations and the UK.’The UK economy is a disaster, an utter disaster on any number of fronts,’ Mr Smith said. ‘The government went into a downturn with a big deficit - that is criminal negligence.’Mr Smith added: ‘Additional taxes won’t work - you have got to cut the spending.’ Tullett announced last December that it will help employees move abroad if they want to avoid the top rate of tax. Mr Smith, who employs 700 brokers in London and has offices Hong Kong, Singapore and other centres said workers are already looking at relocating.’Certainly two or three of our significant desks expressed a lot of interest in relocating and have done quite a lot of work on” the practicalities of a move, he said.KPMG’s analysis shows that the 50 per cent income tax rate will sharply tilt the balance between living in London and other financial centres.London today ranks sixth out of the eight key financial centres, in terms of the tax burden for high earners.Professionals based in Geneva with a total salary and bonus package of around £1 million would pay about £60,000 more in tax than those in London. High earners in Frankfurt would pay around £80,000 more in tax on a £1 million package.But when the new rate comes into force the UK jumps to the top of the list of eight financial centres with the most onerous tax burden for any worker earning £500,000 or more in pay and bonus. Ian Hopkinson, of KPMG, said: ‘You can see from the calculations that for those earning significant bonuses, London has moved from being highly competitive to being the most expensive location.’

Graeme Leach, chief economist and director of policy at the Institute of Directors said: ‘The 50 per cent rate is a policy that should never have been announced. The indirect impact on entrepreneurial aspiration, business confidence and foreign direct investment is likely to be significant.’We suspect that little or no money will be raised and we urge the next government to reverse the increase as soon as possible.’The government’s windfall tax on city bonuses has also led to anger in the City. That imposes a 50 per cent one-off charge on the banks themselves for any bonus that they pay out in excess of £25,000. But it has not changed behaviour in the banks, who are still handing out multi-million pound packages to thousands of workers.Banks have been stomaching the cost themselves and forcing shareholders to pay for the levy, rather than risk annoying their top traders by taking it out of the bonus pool.The Treasury points out that people take many factors into account, not just tax, when deciding where to live or base their businesses.Tax minister Stephen Timms last week denied that the higher rate would harm the UK. He said: ‘Don’t agree that the new 50p rate of income tax will harm UK competitiveness, particularly if you look at what others will have to do. ‘It effects one per cent of the population. It is right that those with the broadest shoulders bear their share of responsibility during the consolidation. In these circumstances, and for the time being, it is fair and justified.’

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Foreign workers filling British jobs

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By Roland Gribben

Published: 7:49PM GMT 18 Feb 2010

One in five employers have recruited foreign workers over the last three
months with almost 25pc of public sector concerns offering them jobs
compared with 15pc of private sector businesses.

The survey
by the Chartered Institute of Personnel and Development (CIPD) and
business advisers KPMG based on data from 700 public and private sector
employers shows foreign workers are filling more British jobs overseas as
well as at home.

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Now it’s the public sector’s turn to take the pain as one with one in three bosses set to cut staff

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By
Daily Mail Reporter
Last updated at 2:31 PM on 15th February 2010

One in three public sector employers plan to slash jobs this year, a new report revealed today.A survey of over 700 employers showed a ’substantial’ fall in employment intentions in the public sector, leading to predictions of a difficult few months ahead for jobseekers.The Chartered Institute of Personnel and Development said the jobs market was still ‘on the ropes.’
The UK jobs market remains ‘on the ropes’ as bosses prepare to cut staff and outsource jobs abroad
It said employers were planning to cut staff rather than hire new workers, and the outlook was particularly ‘bleak’ in the public sector where a third of bosses intended to reduce their workforce in the first quarter of the year.Public administration and defence would be particularly hard hit for jobs, the CIPD warned.

Chief economic adviser John Philpott said resilience in the UK jobs market in recent months was ‘a mere pause for breath.’He warned there were ‘more testing rounds ahead’, adding: ‘With many private sector companies looking to move jobs abroad in an attempt to find the right balance between skills, quality and cost reduction, the jobs market needs all the continued support and protection it is getting from the Government.’The survey showed that one in 10 private firms planned to outsource jobs abroad this year to countries including India and those in Eastern Europe.Alan Downey, head of public sector at KPMG, which helped with the research, said: ‘It is now only a matter of time before we are faced with the deepest and most prolonged cuts in public expenditure that anyone can remember.’In fact, many public sector bodies have already started to feel the pain and are drawing up clear and radical plans to reduce costs.’He said alternative ways of cutting cuts than reducing the pay bill needed to be considered, including consolidating operations and “reconfiguring service delivery” to reduce costs while maintaining quality.He said: ‘Some of this can be achieved quickly, but many of the changes that are needed will require careful planning.’Plans need to be made now, so that the public sector is ready to respond immediately, whenever the incoming government decides it is time for the axe to fall.’The report was published ahead of new unemployment figures on Wednesday which will show that around 2.5million people are out of work.The CIPD report also showed that one in four employers planned to make redundancies in the first three months of this year.These employers, from all sectors of industry, planned to cut 6.2 per cent of their workforce, compared with 3.8 per cent in the previous quarter.Shadow work and pensions secretary Theresa May said: ‘It’s deeply worrying that there are a million people on part time work looking for full time jobs, a record eight million who are economically inactive and more than 900,000 young people out of work.’Employment minister Jim Knight said: ‘We are investing £5billion to help people into jobs - opposed by the Tories. There are 450,000 fewer people currently unemployed than predicted in last year’s budget and 70 per cent of people leave unemployment benefit within six months.’ 

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Fight back against the super taxes

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By Emma Simon

Published: 6:30AM GMT 05 Feb 2010

From April this year high earners will be hit with a triple whammy of new
taxes.

For starters anyone with earnings over £150,000 will be taxed at the new “super
rate” of 50pc. Remember earnings encompass more than just your salary:
bonus payments, investment income, interest on savings and any rental income
derived from property are all potentially subject to this higher rate. (The
only exception is divided income, which will be taxed at an effective rate
of 36.1pc.)

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Tough times for the rich (and well off) as London tops the tax league

Boohoo, I hear you cry. But in the City this counts and the financial services
industry is still our biggest and most successful business.

According to KPMG, someone on £1m will pay £491,278 in tax and social security
in 2010, following April’s tax rises which will take the top rate of income
tax to 50pc.

In Frankfurt the figure is £486,808 and Paris £461,128. New Yorkers with
equivalent annual earnings of £1m will pay £432,770 in tax, while people who
opt to leave London for Switzerland will see their tax bill fall to
£418,186, a saving of £73,092. That’s a material sum and makes the threat of
a gradual exodus from London real.

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False dawn for Christmas spending spree hopes

A “disappointing” rise in high street sales last month has dealt a blow to
hopes that festive spending will help to power Britain out of recession.

The growth in the value of like-for-like sales slowed to 1.8 per cent in
November, down from 3.8 per cent in October and 2.8 per cent in September,
figures from the British Retail Consortium (BRC) show. Economists had
expected a 4 per cent rise. Total high street sales were 4.1 per cent higher
than in November last year, against a 5.9 per cent rise in October.

Stephen Robertson, BRC director-general, said: “We would have expected a much
stronger growth because the comparison is with very poor results in 2008
when November was the second-worst-performing month of the year. Consumer
confidence is fragile and has taken a turn for the worse.”

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Government loses £17billion as recession hits income tax receipts

By
Scott Warren
Last updated at 12:55 PM on 05th December 2009

Nearly two million Brits have accepted a cut to their pay or working hours as alternatives to unemployment during the recession.Those desperate measures have caused income tax receipts to fall by almost a fifth, leaving the Government facing the largest peacetime deficit in history.Ministers are expected to confirm next week that they are likely to borrow almost £180billion this year - equal to the NHS and education budgets combined.
Recession impact: While job losses have not been as great as was feared, cuts to pay and hours have caused a steep fall in income tax receipts
Chancellor Alistair Darling is expected to confirm in his pre-Budget report that between April and October, income tax receipts fell by 16 percent, or more than £17billion from the same period in 2008, with about 1.7million workers accepting less pay or less work instead of heading for the dole queue.
Tax receipts down: Chancellor Alistair Darling is expected to address the issue in his pre-Budget speech
A treasury official said: ‘This wage restraint is, in bald terms, there has been lower unemployment. But the price we have paid is we have less money coming in and therefore higher borrowing.’A third of all pay settlements in the past year, affecting about 10million workers, were for pay freezes or below-inflation increases. Previously, only 2 per cent were in that category.On top of that, independent research has found about 7 per cent of businesses are preparing to cut workers’ pay this year.Large companies including BT and KPMG have given their workers sabbatical leave in return for pay cuts.Treasury expects unemploment to continue to rise next year.Mr Darling is expected to use the pre-Budget report to warn that expected growth in the economy before the New Year, Britain will post its biggest slide in economic output since records began. He will forecast a drop in gross domestic product of 4.75 per cent this year, and a rise of just 1.25 per cent next year.Steelmaker Corus announced yesterday that it would slash 1,700 jobs as it cuts production at its Teesside plant.

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Former owners Punch Taverns and Whitbread face Threshers liability

By Jonathan Sibun

Published: 6:19PM GMT 16 Nov 2009

First Quench Retailing, which is behind the Threshers chain as well as The
Local, Wine Rack and Haddows, was previously owned by Punch and Whitbread.

Both companies could be forced to take back control of First Quench stores
after the group’s collapse late last month.

KPMG, which is handling First Quench’s administration, has yet to quantify how
many off licences could revert to Punch and Whitbread although both
companies said they believed the number would not be “material”.

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Fire sale at hundreds of off-licences as top brands go into administration

By
Sean Poulter
Last updated at 2:01 PM on 06th November 2009

Savings of more than 30 per cent on champagne, wine, beer and spirits are on the cards at 373 big name off-licences which are set for closure.The ‘booze fire sale’ is taking place at outlets in the First Quench chain, which includes branches of Threshers, Wine Rack, The Local, Haddows, Bottoms Up and Victoria Wine.Details were announced by KPMG today, who have been brought in to run the business, which went into administration earlier this week.
Last drinks: First Quench is to close 373 outlets including Threshers, Wine Rack and Bottoms Up stores
First Quench operates around 1,200 outlets across the country employing around 6,300. However, KMPG has decided that 373 of these are not viable and should put up the shutters.The stores which are listed for closure are expected to be mobbed by customers looking to stock up on drink ahead of the Christmas and New Year festivities.The sale was triggered at noon today when KPMG announced the locations of the branches that are to close with the loss of some 1,738 jobs.

These include 47 in Scotland, centred on Glasgow and Edinburgh, some 26 in London, 24 in Sussex, 19 in Surrey and hundreds more across the country.The closures will be a heavy blow to the streets and communities they currently serve. Many of the Threshers outlets offer food and other products alongside alcohol and are valued by customers.KPMG’s Richard Fleming said: ‘Unfortunately, after reviewing the viability of the store network, 373 loss-making stores are to be closed.  ‘Depending on stock levels, 247 of the stores will continue to trade until  November 25, with the remaining 126 trading until December 2.  ‘As part of the closure programme, liquidation sales will take place at each of the stores scheduled to be closed with the stock being sold off at a discount from Friday, November 6.’ Mr Fleming said: ‘The remaining stores will continue to be traded as usual while we seek a buyer.  ‘So far, we have received considerable interest in the business from a range of buyers, including trade, individual investors and private equity.’The remaining stores are trading well and we believe they present an attractive investment.  We are confident of securing a sale in the coming weeks.’The loss of the 373 shops will leave a black scar in High Streets across the country.One study has warned of a High Street bloodbath that will create ‘Ghost Towns’ across Britain with a prediction that 72,000 stores will put up the shutters this year - almost 200 a day.The total number of vacant shops is expected to more than double from 63,000 in December to a record 135,000 by the end of 2009.Small market towns are predicted to feel the worst effects, turning many into Ghost Towns - deserted by major chains and independents.The closures will bring huge job losses with some analysts suggesting as many as 135,000 shop workers will join the rising unemployment total.Marks & Spencer is expected to announce it is cutting close to 1,000 jobs in its stores and several hundred jobs at its head office.A team from business analysts Experian regularly surveys the number of empty stores in high streets and shopping malls.It says the proportion is expected to rise from 7 per cent in December to 10 per cent in February and an all-time high of 15 per cent - 135,000 outlets - by the end of the year.Director of Retail Consultancy at Experian, Jonathan de Mello, said: ‘The unprecedented level of retail vacancy will be disproportionately spread across Britain, so that smaller retail destinations, in particular market towns, will be worse affected. ‘The loss of major multiples such as Woolworths will leave a significant gap in these towns and is likely to have a knock on effect with other retailers.’Many local authorities and centre managers will face a challenge this year, as they seek to reverse the effects of retail decline.’

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