1. Innovative 2. Reach of 3. Regulatory 4. Access to 5. Resilient business Our global offer to business: ecosystem 昀椀nancial activity environment talent and skills infrastructure London and the UK’s competitive 16 strengths supporting economic growth 3.2 Tax High tax rates in the UK negatively affect its international competitiveness. Companies may be dissuaded from opening of昀椀ces because of high corporate tax rates, and international talent may prefer to relocate to countries with lower taxes. Singapore and 25% 45.5% 154 Hong Kong have the most competitive tax bases but operate different economic models. Firms and individuals in the UK bene昀椀t from the largest double taxation treaty network. corporate tax in the UK tax rate paid by Double tax treaties between the UK London banks in 2023 and countires around the world mid-level complexity in comparison Corporate and personal tax rates in Double tax treaties fuel cross-border to other GFCs. the UK are comparatively high. business activity. Source Tax is an important consideration Double tax treaties (DTTs) bene昀椀t for both companies and workers businesses and individuals as they PWC 2023, KPMG 2023, EY 2023 deciding on a location. At 25%, the allow a single instance of pro昀椀ts The UK will soon be the only GFC to UK and France have the highest or income to be taxed. Businesses levy additional taxes on 昀椀nancial corporate tax rate across our GFCs. located in countries with a high services companies. However, France recently reduced its number of DTTs can access more tax rate from 27.5%, whereas the UK’s markets but only pay tax at home. The UK, France and Germany all levy increased from 19%, leapfrogging the Similarly, employees can work additional taxes on FS companies. US with a corporate tax rate of 21%. across borders without being The US, Singapore, Hong Kong and Germany has the lowest corporate taxed in two places. The UK has the Japan do not. UK banks also pay tax rate at 15.8%. highest number of DTTs amongst the highest rate of tax amongst GFCs: 154 treaties with countries 昀椀nancial centres and have seen an For personal tax, Hong Kong and around the world. Hong Kong and increase in corporation tax, as well Singapore are outliers with far lower the US have the fewest with 56 and as the bank levy and bank surcharge. rates than other GFCs (17% and 22% 68, respectively. This helps bring Banks in London paid a 45.5% tax respectively). The UK’s highest rate is international talent to the UK and rate in 2023, higher than New York 45%, shared by France, Germany and allows UK citizens to work in more (27.9%) but lower than Frankfurt Japan. Despite the US having lower countries without being penalised by (46.8%). Although European banks tax rates in general, NYC has a top double taxation. are currently paying similar tax earner rate of 37%, levied on earnings Source rates as UK banks, this is expected greater than $693,751. In contrast, the to decrease as the EU winds up the UK’s top rate is applied on earnings UK Finance 2023 European Single Resolution Fund. above £125,140. Although the US This would leave the UK as the only generally has lower taxes, its tax major 昀椀nancial centre with sector- system is considered one of the most speci昀椀c taxes. complex in the world. The UK has a Edinburgh city centre