Jamie Dimon, the chief executive of JP Morgan, has cautioned UK Chancellor John Healey against raising taxes on the financial sector ahead of his upcoming Budget. Dimon reportedly communicated in a call last week that higher taxes risk prompting financial firms to leave Britain. This warning comes amid speculation that Healey may need to increase taxes to fund spending plans, with potential options including an increase to the bank levy or corporation tax surcharge.
Dimon, as reported by the Financial Times, expressed that a windfall levy would be unwelcome. He cited a decline in finance roles in New York, which he partly attributed to the city's tax burden, as an example of the potential negative consequences. The exchange occurs as concerns grow over an exodus of companies from the London stock market, with some firms delisting and others being acquired by foreign entities.
Dimon also reportedly told Healey that addressing the UK's economic challenges requires "good policy." However, individuals familiar with the conversation noted that these comments were not exclusively about the UK.
This is not the first time Dimon has voiced concerns to the UK government. Last month, he warned Andy Burnham that higher taxes could lead to "adverse consequences" and reiterated a threat to potentially relocate JP Morgan's London headquarters. In July, Dimon stated on the Master Investor Podcast, "I mean, it may sound great, 'tax the banks', but it's $5billion that my shareholders paid on that extra tax. I just think things like that have adverse consequences."
Dimon, who has led JP Morgan since 2006, also cautioned against altering the current tax system, where banks pay a 28 percent corporation tax, exceeding the standard 25 percent. "If you have an uncompetitive tax system, capital leaves your country," he explained. "And if capital leaves your country, it goes to other countries. And you see that now. You see, what is it? How many companies have delisted from London in the last couple of years? I wouldn't want to see that if I was running a country."
Recent years have seen increased bank profits due to higher interest rates, leading to concerns that the sector could be targeted for additional taxation. The Trade Union Congress has advocated for an increase in the bank surcharge to help alleviate the cost of living.
Dimon also indicated that changes to the tax regime could jeopardize JP Morgan's plans to construct a new skyscraper in London, an estimated £3 billion project expected to house 12,000 employees.