CITY workers paid £1m a year will be the worst off high earners in the world when the 50 per cent rate of income tax is introduced from 6 April.
A Londoner on £1m will take home £300,000 less than someone on the same salary in Singapore, £130,000 less than a similar earner in Tokyo and £73,000 less than in Zurich, according to calculations by tax experts at KPMG.
At the moment, London’s £1m earners pay less tax than those in Frankfurt, Paris, Mumbai, New York or Zurich. But once the 50 per cent tax rate takes effect, London tops the table.
The tax take on a £1m salary for a Londoner would be nearly £5,000 more than in Frankfurt, and £30,000 more than Paris. For those on £250,000 a year, however, the difference between London and rival financial centres is not great.
After the introduction of the 50 per cent tax rate, the capital only moves up from fifth to fourth place compared to its rivals. Tax on those earning £250,000 in London will still be lower than in Frankfurt, Paris, Mumbai and New York.
KPMG’s Nick Bacon said this should provide some reassuring news to those who fear higher taxes will cause an exodus from London.
“There is not much difference between the tax take on a £250,000 salary in London and other financial centres after the 50 per cent rate. For people concerned about the City’s relative position against its peers around the world, these figures show London will still be very much in the pack,” he said.