Goldman Sachs (GS), which paid more than $3 billion to the Exchequer’s ailing coffers in corporation tax alone last year, has begun a review of its London operations, a move that could result in entire departments going overseas to avoid Britain’s new tax measures unveiled last month, the Daily Telegraph reported in its Monday edition.
According to the report, Goldman Sachs International, which employs around 5,000 staff in London, is considering its options after the British Government introduced a 50% tax on bonuses above £25,000 and a 50% income tax top rate for those earning more than £150,000 a year.
The Telegraph said the world’s most powerful investment bank has asked an internal team to examine various strategies, including whole divisions being uprooted and moved abroad. Observers suggest that among the operations which will be reviewed is Goldman’s proprietary trading arm, which is estimated to make up to 90% of the bank’s profits. Sources told DT that Geneva would be a likely destination for the “prop desk”, where tax on performance fees can be negotiated with the Swiss government.
The paper also said that the review was in the very early stages and could also recommend no changes at all.
NC: Last month a City source said: “Goldman could move a relatively large number of people if it wants to. Given how much Goldman and its staff contribute to the tax take, the firm has plenty of leverage”.
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