Tullett Prebon, the specialist broker for investment banks, said it will help relocate any of its 700 London-based broking staff from Britain who want to avoid the Goverment's controversial new 'supertax' on bank bonuses.
The move by such a well-known institution and headed by leading City figure, Terry Smith, will add to growing fears that the new tax will spark an exodus of banking jobs from the City to other financial centres after Alistair Darling announced in last week's Pre-Budget Report that bankers' awards over £25,000 will be taxed at 50 per cent.
Tullett Prebon said in a statement e-mailed to staff that many of its brokers had already expressed an interest in moving offshore and it would look into relocating those who expressed a wish to quit the UK "and will seek to facilitate, where possible and appropriate, relocation to the company’s other offices around the world which have more certain taxation regimes.”
Tullett Prebon has offices in New Jersey, Hong Kong, Singapore and Tokyo. It is understood some staff have expressed an interest in moving to Switzerland. The company has said it is up to individuals to determine where they want to be located.
A spokesman for Tullett Prebon said: "It's clear that our main effort at the moment has to be to retain the brokers, because it is the brokers that generate our revenue."
Tullett's European headquarters are based in London, but because many of the broking staff are not British, they may not have strong domestic ties to the country.
The Government has said that the tax will run at least until next April but has not confirmed whether it would be renewed in subsequent years.
The Treasury has recently indicated that it does not intend to include brokers in the new supertax. But a Tullett spokesman said: "We have read the enabling legislation, and it is at odds with what HM Treasury seem to be saying. So either HMT change what they say, or they change the enabling legislation."
Tullett Prebon, known as an "interdealer broker" because it acts as a middleman in derivatives trades between investment banks, is the world's second largest such broker after Icap.
The competition between rival houses for interdealer brokers is fierce. Tullett Prebon is currently engaged in a bitter legal battle with US rival BCG, accusing it of attempting to poach up to 90 London staff and 80 workers in New York. It said last month it was taking legal action against BGC in Britain, the US and Hong Kong.
The British Bankers' Association has warned that the supertax could damage the standing of the City as an international financial centre. Its chief executive, Angela Knight, said last week: "Viewed from abroad, London may well look now like a significantly less attractive place to build a business."
Bob Diamond, president of Barclays, has also warned of the possible damage to the City the tax would cause.
City broker will relocate staff to avoid supertax
