Sunday, May 24, 2009

British banks revolt against Obama tax plan

I'm starting to like this word revolt.

    British banks and stockbrokers may refuse to take on American clients if new international tax proposals outlined by President Obama are passed.

    The decision, which would make it hard for Americans in London to open bank accounts and trade shares, is being discussed by executives at Britain's banks and brokers who say it could become too expensive to service American clients. The proposals, which were unveiled as part of the president's first budget, are designed to clamp-down on American tax evaders abroad. However bank bosses say they are being asked to take on the task of collecting American taxes at a cost and legal liability that are inexpedient.

    Andy Thompson of Association of Private Client Investment Managers and Stockbrokers (APCIMS) said: "The cost and administration of the US tax regime is causing UK investment firms to consider disinvesting in US shares on behalf of their clients. This is not right and emphasises that the administration of a tax regime on a global scale without any flexibility damages the very economy it is trying to protect."

    One executive at a top UK bank who didn't want to be named for fear of angering the IRS said: "It's just about manageable under the current system - and that's because we're big. The danger to us is suddenly being hauled over the coals by the IRS for a client that hasn't paid proper taxes. The audit costs will soar. We'll have to pay it but I know plenty of smaller players won't."

Read all of it.