One in five investment professionals to leave UK due to high tax
One-fifth of investment professionals are considering leaving the UK to work elsewhere in the next 12 months, primarily due to the high relative rate of UK tax, according to a survey by CFA UK.
The leading beneficiaries are likely to be Switzerland, the US, Hong Kong and Singapore.
Most members of CFA UK, the UK member society for CFA Institute, hold the chartered financial analyst designation. CFA charterholders are internationally mobile and many of the society’s members hold non-UK passports.
The society recently surveyed its 8,500 members, who are typically portfolio managers and research analysts, to find out if they expected to leave the UK to work elsewhere in the next year and, if so, why. Close to 800 members responded to the survey and of that number 20 per cent indicated that they expected to leave the UK in the next year, 41 per cent said that they might do so, and 39 per cent said that they would not.
Members were invited to select as many answers as relevant from a list of reasons as to why they would consider leaving the UK. Seventy six per cent indicated that UK tax rates were an influence; 41 per cent cited better career prospects elsewhere; 40 per cent noted better earning potential in other countries; and 30 per cent selected changes to the UK non-domicile regime as a reason for considering a move.
When questioned as to where they would move the countries most frequently selected were Switzerland (23 per cent of respondents); the US (15 per cent); Hong Kong (11 per cent); Singapore (nine per cent); Australia (seven per cent); UAE (six per cent) and Canada (five per cent). A relatively high proportion of those suggesting that they would move to the US, Australia and Canada were expatriates from those countries.
Few respondents indicated that they were considering a move to another EU country, suggesting that EU regulatory developments and tax rates are likely to discourage investment professionals from moving to other EU financial centres.
Will Goodhart, chief executive of CFA Society of the UK, says: "London's financial services sector enjoys a strong and influential reputation. However, the proposed increase to UK tax rates will be damaging. We should not close our eyes to the fact that other financial services centres offer attractive working conditions for our international community of investment professionals. Instead of providing reasons to leave the City, by raising taxes and introducing unfavourable treatment for employees with non-domicile status, we should be giving highly skilled investment professionals of any nationality reasons to stay in the UK."
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