Paris omitted from UK bank tax report as London rate hits 46.2 percent

London banks face a combined tax rate of 46.2 percent, according to a new industry report that omits Paris from its global comparison. The study, released by UK Finance, argues that the City of London is the most tax-intensive financial hub in the world. The group wants Chancellor John Healey to hold off on new levies in next week's budget to protect jobs and investment.

The data comes from PwC, which calculates the total burden on a large bank by combining corporation tax, social security, VAT, and sector-specific charges. London’s 46.2 percent rate exceeds Amsterdam at 42.2 percent, Frankfurt at 39.1 percent, Dublin at 29 percent, and New York at 27.9 percent. UK Finance sent these figures directly to the Chancellor’s office to support its lobbying effort.

Critics point to the absence of Paris, a major rival that hosts JP Morgan, Goldman Sachs, and Barclays. Independent calculations reviewed by a top accountancy firm place the tax rate in Paris between 51.6 percent and 57.3 percent. That figure is up to 11.1 percentage points higher than the rate in London.

UK Finance said it considered adding Paris but could not produce a comparable figure using its standard model. The group stated that limiting the list to five cities ensures consistency across years. It noted that in previous reports, jurisdictions like Frankfurt showed higher rates than the UK.

Paul Nowak, general secretary of the Trades Union Congress, called the exclusion misleading. He said the data does not match the actual taxes paid by major British banks, which he believes are lower than those of competitors. Simon Youel, head of policy at Positive Money, questioned whether Paris was left out to support the claim that the City contributes more than other global sectors. Youel hopes the Chancellor will raise bank taxes to recoup profits driven by higher interest rates.

The TUC proposes increasing the bank surcharge from 3 percent to 8 percent, a move it says would generate 2.25 billion pounds annually. Nowak argued that the Chancellor must ask beneficiaries of windfall profits to pay a fairer share, especially while many households struggle with rising costs.

Banking leaders offer mixed views on the potential impact. CS Venkatakrishnan, chief executive of Barclays, told journalists on Thursday that a tax rise is manageable and gave his full support to the government. Jamie Dimon, head of JP Morgan, warned in May that the bank could cancel its 3 billion pound London headquarters if the UK becomes hostile. Dimon met with Andy Burnham and Healey last month to warn that new levies risk investment.

A Treasury spokesperson said tax decisions rest with the Chancellor and that the department does not routinely comment on speculation. PwC has been contacted for comment on the report’s methodology.