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Tax threat worries London Greeks Dated : 20-11-2007

Greek shipowners say they are worried by proposals of Chancellor of the Exchequer Alistair Darling to charge so-called non-doms a £30,000 ($63,066) flat fee to stay outside the tax system once they have lived in the UK for seven years.
“I am less worried about this initial tax effort than I am that it signals a trend,” one London-based Greek owner told Fairplay on condition of anonymity. “First, they will want to tax the principals, then it will be families and subordinates.
“The UK government clearly makes more now because of all the [maritime] business that is conducted here. It would be a shame to see London lose its place as the global centre for commercial shipping over something like this,” he warned.
However, most London-based Greeks were reluctant to talk to Fairplay. Shipping sources in Greece point out that Athens has welcomed the UK government tax proposals since it would like to see London’s Greek shipping community return home.
Another senior Greek shipping figure said he would be prepared to pay the flat fee as now proposed. “For us this amount is negligible, and we will pay it as long as no further legislation is introduced that may threaten our companies in London and ultimately put our staff and revenue at risk,” he told the London Greek News.
The British tax system takes about 40% of the average UK family’s earnings – yet up to now, only token amounts off non-doms, and then only if they are honest.
Hellenic shipping controls four-fifths of the global dry cargo market, and Greece is still the leading merchant shipping nation.
Greeks dominate ship sector
Greeks are represented by at least 120 agents in London, employing more than 1,500 people from Greece alone, making up a very substantial portion of the UK maritime services sector. More than 4,500 people altogether are employed by Hellenic shipping companies in London, generating revenues of about £15-20Bn per year.
One London-based Greek investment banker said the proposed charge meant that he would not stay in London after having worked there for seven years.
“I’m not in London for the weather,” he quipped.
City business leaders fear the tone of the chancellor’s pre-budget statement last month could signal changes in the Labour government’s policies, which have generally been pro-enterprise since it came to power in 1997.
When the sting is cumulative
“Whatever a government does to alter a tax position detrimentally is going to have a negative effect somewhere along the line,” Maritime London’s CEO Doug Barrow commented.
“I use the analogy that one wasp sting rarely kills anybody but cumulatively it can kill you. [The non-domiciled taxation issue] on its own may not affect many people but cumulative tax changes can do.”
He explained that the aim of Maritime London is to promote trade and added that what London needs is a stable fiscal environment –clear, straightforward and welcoming to business.
The government should be consulting the key lobbying organisations such as the Baltic Exchange and the Chamber of Shipping about the proposed changes, he advised. While a lot of media attention has been devoted to the reaction of ship owners, Barrow pointed out that a large group of less wealthy people could also be affected by the charge.
“An amount like £30,000 ($63,000) would not worry the top income earners, but there are an awful lot of middle-income people that will have an effect on,” he explained.
Barrow noted that the government has published a residence and domicile review on its HM Revenue and Customs website: hmrc.gov.uk/pbr2007/pbrn18.pdf.
And Westminister is inviting comments, he added, advising the shipping sector to be free in doing so.
Source: http://www.fairplay.co.uk/secure/display.aspx?articlename=fpnw20071115019nw&phrase=greek

 
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