London's role as the world's financial capital has been compromised by the new higher tax rate of 45%, Bob Rothenberg, senior partner at accountants Blick Rothenberg, has warned.
The change, which will affect those who earn more than £150,000, 'are going to drive those considering coming to the UK to rethink their plans,' said Mr Rothenberg.
Stephen Herring, senior tax partner at BDO Stoy Hayward, took a similar view. He questioned whether the new rate 'is worth the inevitable erosion of the UK as providing a tax-friendly environment for entrepreneurs and business leaders who often create employment opportunities for their employees'.
Andrew Goldstone, head of personal tax at tax solicitors Mishcon de Reya, was also damning of the 45% rate, which is scheduled to take effect from April 2011.
He claimed that the Chancellor had 'spooked some of the country's most successful wealth creators… with his politically motivated tax hike'.
Mr Goldstone added that the move 'will generate very little additional tax revenue yet the downsides could be enormous'.
The new higher tax band was, however, welcomed in some quarters.
The TUC's general secretary, Brendan Barber, applauded the Chancellor for 'breaking the taboo that the super-rich should never pay more tax'.
Chas Roy-Chowdhury, head of taxation at the Association of Chartered Certified Accountants, was cautious: 'This higher rate of tax will only affect the top 1% of high earners...[and] it remains to be seen whether this is palatable to higher-rate taxpayers who feel they bring wealth and prosperity to the UK'.
