Lucerne makes tax offer designed to attract expected exodus from the City

Nick Clark
Tuesday 18 May 2010 00:00

A small city in Switzerland hopes to kickstart the long-predicted City exodus by sending over their top tax man to tempt UK companies and bankers with lucrative tax rates.

Lucerne officials hope to swell the city's 76,000-strong population and surrounding region with wealthy investment bankers and hedge fund traders with the promise of some of the lowest tax rates in the country.

It is sending the head of the region's tax administration ("an affable man who positively wants you to come and live next door!" according to the publicity) to pitch in London next month.

The canton of Lucerne has declared the lowest corporate taxes for companies moving from the UK "subject to negotiation" of as low as 10 per cent by 2012. It offers a competitive tax regime for professionals and pointed out that, since June 2004, EU citizens have been able to buy property in the country. "With the lure of the Swiss tax man, one wonders why more people aren't doing it," says its blurb. The canton has hired the accountants BDO and a company in the UK called Relocate to Switzerland to drum up interest.

London professionals looking to get away may be enticed by the city's Kapellbrücke, the wooden bridge built in 1333, but substantially rebuilt after a fire 18 years ago. Or perhaps the Fasnacht carnival every year, which concludes with a parade.

However, the event organisers may be dismayed to read recent reports that despite the 50p tax rate, UK bankers are still earning more after tax than their Swiss counterparts. Research from Selby Jennings, a recruitment firm, found that fewer professionals than expected are likely to flee the UK.

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