March, 09, 2010

The chief executive of the British Bankers' Association said the increased U.K. tax burden had shaken traditional notions of fairness among top earners.London-based senior bankers will pay more income tax than they would in any other financial center when the 50% tax on income of more than £150,000 ($227,000) comes into effect on April 6, according to calculations prepared by KPMG for Financial News. The accounting firm calculated employee tax and social-security payments for eight different financial centers: London, New York, Paris, Frankfurt, Geneva, Zurich, Dubai and Hong Kong.

The calculations come amid fears that London could lose its competitive edge as a financial center.Angela Knight, chief executive officer of the trade association representing banks operating in the U.K., said that for the past 30 years there had been an "unwritten understanding" that whatever happened in the rest of the U.K., the financial-services industry would have a proportionate tax regime and be open to international business. She said in an interview that the tax increase and regulatory changes had tested that.

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