A campaign is being launched by the City's most influential trade associations in a last-ditch attempt to persuade ministers to postpone controversial tax proposals for "non-domiciled" workers for at least a year.
The London Investment Banking Association, the trade body representing the most powerful investment banks; the British Bankers' Association; the City of London Corporation; the CBI and London First have either made submissions to the Treasury or are planning to do so by this Thursday's deadline. They all want a cooling-down period of 12 months for the issues to be properly debated.
Liba director Ian Harrison said: "We feel that the tax proposals for 'non-doms' have not been as well researched or as well thought out as they should be. In some cases they are highly complex and unworkable."
Mr Harrison added: "We estimate about 40 per cent of the 100,000 investment bankers who work in London – most of whom are senior managers or young graduate recruits in the banks – will be affected by these changes."
Individual banks are also making their protests known, including the big US houses, which will be hit hardest by proposals to force workers to either declare all income earned overseas or pay a £30,000 levy. US embassy officials have expressed their anxieties to the Government.
Goldman Sachs, which is close to the Government and advised it on the Northern Rock saga, has had its own meetings with the Treasury. Sources say that many senior ministers privately accept that the proposals are damaging to the UK and want to see them either changed or delayed.
Anger over the proposals is bringing together the City and the arts. Paul Myners, chairman of the Tate trustees and the Guardian Media Group, Paul Ruddock of hedge fund Lansdowne and chairman of the V&A, and former Goldman Sachs banker Richard Sharp are all lobbying the Government.
Bankers fear the changes may prompt many of the bigger US houses to reconsider London as the headquarters of their Europe, Middle East and Asia operations. One said: "London may be the best centre now but once a big US bank like Citigroup thinks that its bankers are being penalised it will move very easily – Dubai, Geneva or Dublin. They are all serious alternatives.
"These proposals have been put through in a rushed, cack-handed and ludicrous manner. The City accepts that there should be equity over the tax treatment of domiciled workers and non-domiciled. However, the Government has once again rushed into this mess without thinking through the consequences, which could be severe."