City's expat bankers feel pain as taxman targets 'low-hanging fruit'
Monday 15 October 2012
The taxman's more aggressive efforts to crack down on tax avoidance by foreign bankers working in the City appears to be paying off.
HM Revenue & Customs has increased its take from investigating high-income international workers by 23% to £117.2 million over the last two years.
Ray McCann, director of law firm Pinsent Masons, which carried out the research, said: "HMRC is really cracking down on highly paid expats, most of whom are working in investment banks and hedge funds. Foreign expats have always been a high-yielding target for HMRC, and with the organisation trying to boost its revenue, it's not surprising that they're targeting low-hanging fruit."
Pinsent Masons said the HMRC team that targets ex-patriates living in the UK generated an "additional yield" of £94.9m in 2009-10 and £110.8m in 2010-11 against £117.2m in the most recent financial year. Mr McCann added: "This rise in additional tax take is also interesting, given that City bonuses and the number of investment bankers have been slashed since the credit crunch. The Eurozone crises and the economic downturn have really depressed investment banking revenues, so HMRC has had to put in a lot of extra effort to increase its take from these investigations."
The Government has stepped up efforts to crack down on high-earning foreigners since 2007, when Chancellor Alistair Darling copied the then Tory shadow chancellor George Osborne's plan to impose a levy on non-doms.
Mr McCann said the City is receiving particular attention from HMRC, so expats in the financial services sector are even more likely to come under investigation.
"Some tax planning schemes that have been a popular way for banks and hedge funds to help their staff manage their tax bills are now very much under the Treasury's microscope," he explained.
Despite this, there is speculation Britain will see an influx of French financial workers after President François Hollande signalled plans for a 75 per cent rate of tax.
...while downturn hits goldman's london operation
Investment banking revenues slumped by a third to $421m (£262m) at Goldman Sachs' London operation in the first six months of this year, new figures have revealed.
Half-year accounts for Goldman Sachs International said: "Equity underwriting decreased, primarily reflecting a decline in industry-wide activity."
GSI's total revenues still rose 4% to $3.17bn as institutional client services, which covers fixed income and currencies, and the investing and lending arm both boosted sales.
Pre-tax profits were $847.5m against $1.21bn a year earlier, but this slide is thought to have been caused largely by changes to the value of employee share awards, which are linked to the bank's fluctuating share price.
The accounts also said GSI set aside $81.9m in UK corporation tax for the half year — unlike full-year results for 2011 when accounting rules meant GSI ended up paying just $6.6m on $3.1bn of profits.
Parent company Goldman Sachs Inc will report third-quarter results tomorrow, when it is expected to swing back into profit after a surprise loss a year earlier.
A slew of other US banks will also announce results this week, after JPMorgan became the first to report better-than-expected profits last Friday.
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Number of global billionaires has doubled since the financial crisis
- 3 Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
- 4 Of course, teenage girls need role models – but not like beauty vlogger Zoella
- 5 North Korean officials 'publicly executed for watching South Korean soap operas'
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
Number of global billionaires has doubled since the financial crisis
Elizabeth Norment dead: House of Cards actress honoured by Kevin Spacey after she dies aged 61
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
Nigel Farage and Frankie Boyle clash over Andrew Lawrence's 'Mock the Week' criticism
iJobs Money & Business
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...
£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...
£60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...