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City of London about to become the MOST highly taxed financial centre in the world

If you’re earning more than 250k and have an aversion to paying tax, it is probably time to leave the City of London. As the graph below shows, the City is about to become the most highly taxed financial centre in the world.

When the new 50% rate of income tax is imposed next year and social security payments are also taken into account, a married banker earning 250k in the City of London will retain only 50% of his/her gross income.

This is a lot lower than Paris (58%) and Frankfurt (60%) and Zurich (68%).

It is massively lower than Dubai (95%).

Percentage of 250k (or equivalent) retained after income tax and social security payments

Percentage of income retained after tax.

Source: PricewaterhouseCoopers

Comments (23)

  1. Thanks God i earn less than that !

  2. Thanks God I have moved out already.

  3. Especially after 2008, many bankers earn not much more than 150K (often less), notwithstanding the hype by Henry and his friends. To many of us, the 10% tax rise hurts less than the 50% drop in our bonuses, courtesy of the losses from our credit departments. If we can get back bonuses of the good old days, I am happy to pay even 60% tax.

  4. “Especially after 2008, many bankers earn not much more than 150K”

    Err, 150k is a 60k basic and 90k bonus. Virtually ANYONE in front office 2-3years into the job will be on at least that, including at the TARP banks.

    Seriously, what planet are you guys on?? Stop trying to make out as if everyone’s screwed just cos you’re so rubbish you can’t even get paid 150k.

  5. that’ what i call a high class problem, jeez you could be worrying about where the next rental/mortgage payment was coming from!

    Charles Finkler III Reply
  6. Anon,

    I don’t know where this silly assertion comes from that everyone’s 50% down. 50% is a mean average and reality is anywhere from DOWN 100% to zero to UP 100% and maybe more.

    For what I do, I was fortunate that pretty much every peer at a decent bank got laid off, and most of their business has come to me as a result. So getting double the slice of a slightly shrunk pie, my bonus was almost double in January what it was the year prior. And I’m hardly the only one..

  7. HK is a good alternative to Lon. My wife managed to move there already as a trader 1y ago…hope to make the move soon too (BTW: moved out of Lon 1 year ago now in Dubai). And also, usually the accomodation allowance is inlcuded.

    Paying 50% on taxes honestly is too much, it is a huge pay cut and i would have to change my lifestile a lot. It is sad, I love Lon but there is a limit you cannot pass.

  8. Henry, I really doubt your assertion regarding some of the more troubled TARP banks. Simon Says, you are right that there are people paid more than the year before (I know some) but 50% down is a rough average amongst the people I know (including those who made more P&L this year than the year before). I am not saying no one can do well in this environment. But many of us would be paid significantly better for the same P&L in 2007.

  9. Simon Says,

    Enjoy it while it lasts…….

  10. Charles,

    I suspect by the “III” in there that you’re not exactly worrying about your next rental/mortgage payment, but to those who are, here goes:

    I don’t know where your next payment is coming from. But I can tell you where it’s not coming from. If you happen to work in a back or middle office role dependent on front office demand, it’s not coming from Henry anymore. If you happen to be dependent on the state, then you’re not getting it from Alex’s tax revenue, either. They’ve both left.

    As irritating as the wealthy might be, the simple truth is that they are responsible for much of our employment and the vast majority of tax revenue. And as much as you might want to punish the high earners who caused the crisis (odd, since most who could said to have been responsible have reverted to being low earners), the reverse effect will likely be true. The rich will be a little poorer, everyone else, much more so.

  11. maybe you should move to Guernsey Henry

  12. Please can we get this twerp Henry to go away, he really is an embarrassment to the industry.

  13. This Henry guy really seems to have way too much time on his hands!

  14. hi guys, this taxes thing don’t matter to me. I come here from south america and get job to analyst companies paying 30k. I soon be leaving this disguting country and go to a place where no taxes to be paid. YOu england peoples are peasants compared to me.

  15. if u can get jobs in dubai then word up!

  16. “Please can we get this twerp Henry to go away, he really is an embarrassment to the industry.”

    The only embarrassments here are people who seem to think a 60k base and 90k bonus is somehow unrealistic for the front office. That’s well below average for a junior Associate, yes in this environment.

  17. Gordon Brown has copletely lost the plot.

  18. Davido – you are on 30k, can’t speak english properly / possibly illiterate
    no no no – you are the peasant, amigo

    Henry is largely right about pay levels, but of course there is large volatility around the numbers (both up and downside)

    In fact, when he has listed his total comps y-o-y for the job he does, it sounds pretty reasonable (BTW given we all know where you work and which desk you probably sit on – all the financial data you give out publicly is pretty dumb – just takes a colleague to raise this with HR that you are telling the world how big your bonuses are to the dime, and you’ll be in breach of contract for sure. Most people have a “if tell anyone abc, then xyz punishment will befall upon you” type thing in there)

    anyway – i’m moving to zurich, boring as hell a place but close to italy and london, and won’t have to pay up all that tax

  19. We live in open market. We have equal chance and equal opportunity. There are some class issues in London — but forget London– London is just 1 Pot in the world.

    Rich are richer because they took risk — they contribute higher taxes too. if they buy cars and houses, all are subject to taxes and VAT- in the end, tax goes to tax department by consumption– i.e. how we run the economy.-. is it not so ?
    If you are not rich, you are richer because you probably do not have stress of paying 40% of tax, collecting bills— having accountants and etc –working late night for commitments.

    Nothing is FREE —
    Do not envy about rich or being not rich –

    I believe any tax more than 30% CANNOT BE just even if you are rich or not.

    we work to make life simpler —- but we are complicating it
    is govt trying to help us to make us work like slave by making system more rigid and complex for citizens.
    Obama may be right for 95% of things — i agree with him. He want things for citizens– but i do not agree that obama want to raise taxes on rich. —
    If i have bought 3 cars, i made SALE of more than 100,000
    and State has collected 30% from me and 30% from car selling company.
    is it

    TechnicalNomad Reply
  20. — correction
    The moderator left out my last sentence.

    is it not enough ?
    So, please let London be open city and open department.
    Closing of 2-3 banks is NOT going to make a radical change in how we do business and how we buy and sell.

    Please provide more education to people around and OFcourse eliminate unjust bonuses and throwing wild parties of 50,000 in hotels when 90% of banking staff makes less than 50 K in London city.

    We should restrict on spending people’s money on madness. But we should not restrict on spending company or bank money in growing business to innovate and simplify life for you ,me and around

    Lets keep on innovating and lets keep ourselves detach from this money greed —————- very tough one
    i am still fighting like you :)

    I believe no capital system can survive without greed and no want can be taken out from human soul. Therefore comes the need to restrict and put rules in society otherwise we love the jungle anyways

    Lets try to innovate and make a better system whereby greed and want can decide what exactly is true meaning of life.

    TechnicalNomad Reply
  21. TechnicalNomad
    too long and empty – got bored reading after first sentence

  22. Anyone know where Vienna, Geneva, Chicago and Seoul are? Might be nice if the graph were to have a few more cities listed

  23. So you have two choices: either create your small business with not much people involved or move elsewhere)

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