West Palm Beach (HedgeCo.Net) – The attacks on Alistair Darling and his tax agenda keep coming in, this time from three influential businessmen.
Michael Snyder, policy chairman of the City of London Corporation, Lord Brittan of Spennithorne, a former European Commissioner, and Philip Yea, CEO of 3i Group, a private equity firm, all expressed their beliefs that the proposed tax on non-doms will stifle entrepreneurship and will hurt London’s ability to compete economically.
The new tax plan, which is scheduled to begin on April 1st, would charge non-domiciled residents of the UK a flat tax of £30,000, or about $59,000 a year. It would also make the capital gains tax a flat 18%, wiping out taper relief.
While the tax would net the Chancellor an extra £500 million a year, (just under $1 billion USD), the long-term implications could be disastrous. Hedge fund managers and private equity firms would most likely relocate to avoid the heavy taxes, and their clients would follow.
Earlier this week, chairman of Standard Chartered Mervyn Davies,who is a member of the Prime Minister’s business council, and Alan Yarrow, vice-chairman of Dresdner Kleinwort, also urged the Chancellor to reconsider before his first budget next Wednesday.
Yea and Snyder both have close ties with Darling – they advise him on City issues. However, even if Darling succumbs to the building pressure and nixes his tax plans, Mr. Yea explains how the damage is already done.
“I think the second that successful policy looks like it might get changed then there is an impact…because the big thing that businesses look for is certainty and up until now the received wisdom was that London was a great place to do business. All that looks a little different now.”
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: [email protected]]
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