Bank lobby report leaves Paris out of tax burden data

UK Finance has sent a letter to the Chancellor arguing that London imposes the highest tax burden on banks globally, a claim that rests on data that excludes Paris.

The lobby group, which represents Lloyds, JP Morgan, and Revolut, cited an annual report compiled by PwC to support its position ahead of the budget next week. The report calculates total tax liabilities, including corporation tax, social security, and bank levies. It places London's aggregate rate at 46.2 percent. This figure exceeds Amsterdam at 42.2 percent, Frankfurt at 39.1 percent, Dublin at 29 percent, and New York at 27.9 percent. The group warns that higher taxes could prompt banks to shift operations to rival hubs.

Critics note that Paris, a major competitor hosting investment banks such as Goldman Sachs and Barclays, is absent from the comparison. Independent calculations reviewed by an accountancy firm estimate that a bank in Paris faces a total tax rate between 51.6 percent and 57.3 percent. That range is up to 11.1 percentage points higher than the London figure.

UK Finance explained that it could not produce a comparable metric for Paris using its specific model bank. The group maintained that limiting the analysis to five cities ensures consistency across years. It also noted that previous reports showed other jurisdictions, such as Frankfurt, with higher rates than the UK at the time.

Paul Nowak, general secretary of the Trades Union Congress, described the omission as a misleading tactic to resist fair taxation. He stated that the data likely understates the actual tax burden relative to competitors. Nowak proposed that increasing the bank surcharge from 3 percent to 8 percent would generate 2.25 billion pounds annually. He argued that the Chancellor should ask banks to pay more as they distribute billions in profits to shareholders.

Simon Youel, head of policy at Positive Money, questioned the methodology. He suggested that excluding Paris allows UK Finance to claim the City contributes more tax than other financial centers. Youel urged the Chancellor to raise bank taxes to capture profits generated by high interest rates.

Banking leaders have offered mixed reactions to the fiscal pressure. CS Venkatakrishnan, chief executive of Barclays, said on Thursday that the impact of a tax rise is manageable and that he supports the Chancellor. Jamie Dimon, head of JP Morgan, warned in May that the bank might cancel its 3 billion pound London headquarters project if the environment becomes hostile. Dimon met with Healey and Andy Burnham last month to discuss the risks to investment.

A Treasury spokesperson said that tax decisions will be announced at upcoming fiscal events. The department declined to comment on specific proposals, noting that it does not routinely address speculation. PwC has been contacted for comment on the report's methodology.