There is a small sense of medium sized to large corporations finally starting to baulk at various new business tax burdens being continually levied in the UK.
In separate stories this morning we can see that the Port and Airline operators are seriously considering moving capacity out of Britain to the continent where the arbitrariness of retroactive or ‘boutique’ taxes are less onerous.
While this is in the early stages of name and bluff calling, traders would be advised to remain cautious over the negative possibilities this may engender.
With each week/month of no real signs of an economic upturn emerging the desperation of the Revenue to grab as much as at can to cover the excesses of the current administration may ruffle more and more feathers.
The oft quoted 70% of FTSE 350 income coming from non-domestic sources can turn into a position of weakness rather than strength if more and more of the taxable revenue is transferred to more favourable locales.
While the city slowly starts to regain some confidence, much to the irritation of many journalists (I have to say), the rest of the country seems to be settling ever lower into the mire.
The squeals from many over the lack of hubris from Goldman’s or Barclays (to name just a couple) obscures the fact that many financial institutions did not do as badly as the headline disaster stories of RBS and HBOS.
Many were only forced into raising capital to comply with the increased demands of the regulators and now that much of the competition has been swept away (especially in the investment bank sector) it now seems that some players only have to blink and the money flows in.
Domestic banks are likely to continue to suffer as their loan books decay but the fact is that most units within the square mile are not, now, directly exposed to this problem.
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'UK Taxes and Stronger Banks' edited by DB, updated 24-Jun-09
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UK Taxes and Stronger Banks
There is a small sense of medium sized to large corporations finally starting to baulk at various new business tax burdens being continually levied in the UK. In separate stories... » read from top.