Business

City writes to chancellor asking for shake up of tax system

Some of the City's leading associations will call on the government to review the tax burden imposed on entrepreneurs and the broader finance industry.

A letter is being readied by groups including the City of London Corporation, UK Finance, TheCityUK, the Investment Association and the Association of British Insurers, which will be handed to chancellor Philip Hammond ahead of his Mansion House speech, Sky News reports.

The letter calls for the Treasury to launch a review alongside other measures aimed at ensuring the industry's competitiveness in the post-Brexit period, including reforms to Britain's immigration system, a network of regional regulatory offices to work with start-up businesses, and the creation of a new forum comprising the finance sector, government and regulators.

Although insiders spoken to by City A.M. declined to comment on the specifics, they confirmed the general ambition of the letter, which seeks greater stability, certainty and streamlining of the UK's tax system.

One said: "There was a big huddle a week ago last Thursday with people from the CityUK, Finance UK, Innovate Finance and so on – it had been convened for Hammond to ask [the industry] what do you want us to do for the sector, beyond Brexit.

"They are coalescing around regulation, tax but also people," the source added, noting that Hammond had invited points to be made in a single letter to him following the meeting.

According to Sky, it says: "With regard to the levels of taxation, it is important that the UK remains competitive, and an independent review and analysis of aggregate levels of taxation, coupled with a benchmarking exercise against comparable jurisdictions would be welcome.

"This should focus not only on corporates, but also on the tax attractiveness of the UK to entrepreneurs, especially in fintech [financial technology]."

The letter follows a meeting between the trade body chiefs and Mr Hammond and senior officials earlier this month.

On talent – an area of growing concern for those grappling with post-Brexit recruitment – the letter also seeks a commitment to "flexible arrangements to allow qualifying staff working on short term projects to move easily into the UK, and urgent change to the mechanism by which the Tier 2 cap operates to avoid discrimination in favour of London over the regions, where salaries are higher."

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