INDEPENDENT insurers, asset managers and stockbrokers in the City can breathe a sigh of relief today after the government ended almost a fortnight of tense speculation by confirming they will not be subject to its super-tax on bank bonuses.
Under the new rules, which will still see banks charged at a rate of 50 per cent on bonuses over £25,000 until April, the only firms to be caught by the levy are so-called “BIPRU 730k firms” – larger banks, building societies and investment firms subject to a base capital requirement of €730,000 (£648,000).
The clarification from HM Revenue & Customs comes as the government tries to play down City fears that London’s stringent tax regime may drive banking talent out of the UK.
Barclays chief executive John Varley and Deutsche Bank chief executive Josef Ackermann at the weekend became the latest senior bankers to add their voices to the debate.
Varley warned: “We need a level playing field to make sure that we can compete with the best companies in the world.”
And Ackermann said Deutsche will seek to “globalise” the impact of the tax. “It would be unfair to treat the UK bankers differently,” he said.
Meanwhile Stuart Fraser, policy committee chairman for the City of London Corporation, said the tax could well force firms to move abroad.
There was also speculation at the weekend about the London operations of Goldman Sachs.
Goldman is understood to be considering several options in the light of the bonus tax. And inter-dealer broker Tullett Prebon has already said it will allow staff to transfer to more favourable jurisdictions like Singapore or Switzerland.
Standalone financial services firms will now be exempt. HMRC said: “The diversity of regulated investment activities undertaken by non-banking financial service groups in the UK means the original definition of a ‘bank’ did not effectively exclude all the groups we intended to exclude.”
Tim Linacre, chief executive of independent stockbroker Panmure Gordon, praised the move “as it sends a signal that we are not part of the wider banking network that is being over-regulated”.