IFAs identify prime locations for fleeing financial firms
Monday 1st June 2009: 14:00
By Charlotte Banks
IFAs believe offshore centres such as the Channel Islands, Isle of Man and Ireland will be some of the favourite locations chosen by financial services companies looking to escape London.
They say many of London's top financial services firms will investigate moving their offices elsewhere after punitive tax measures introduced in the Budget.
Bulgaria was another name in the frame, with one IFA saying it has the lowest corporate tax regime in Europe.
Graeme Boiardini, director at Bayliss Clarke Wealth Management, says London has always been a financial capital, but believes tax changes will drive big companies out of the city.
"Consumer spending has stopped, unemployment is rife and London holds no benefits for people at the moment," he says.
Adrian Shandley, managing director at Premier Wealth Management, agrees calling the governments plans a "clear breaking of manifesto promises".
"The danger here is the financial services industry will be punished for the credit crunch, and whilst there was a degree of culpability, the fact remains that financial services is one of the last things the UK is good at," Shandley says.
"I think we will see a mass exodus of financial services firms, probably locating in tax havens such as Jersey, Guernsey, and Monaco. This will in turn result in a huge loss of income and revenue to the UK far in excess of that gained by the taxation of those earning over £150,000."
Steve Laird, a Certified Financial Planner from Carrington Wealth Management, believes the possible failure of London to recover its reputation as a major financial centre could also lead to companies leaving.
"It has always been the case companies could pay less in taxes by basing themselves elsewhere but probably chose not to due to London's position as the hub of financial services in Europe. It was a price that they felt was worth paying - but perhaps not for much longer," he says.
However, other property experts remain positive on London's prospects.
"The city will wait until the elections next year and I don't think there will be a mass exodus until the Government's actions are clear," says Lucy Morton, partner at W.A.Ellis.
Danny Cox, head of advice at Hargreaves Lansdown, agrees: "I'm not convinced that there will be a mass exodus of companies from the UK, let alone before the next election," he says.
"Regulation is likely to have a greater bearing on whether companies up sticks and relocate."
