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According to the IMA, the fund-specific SDRT regime, which is unique to the UK, makes domestic funds less marketable than their European rivals and should, therefore, be abolished.

Because schedule 19 SDRT currently gives the Treasury an annual tax take of approximately £70m, the cost of abolishing the regime would be offset by the increased business and employment tax if “funds were not domiciled offshore due to more favourable tax treatment”, the IMA said.

The association cited a study by KPMG that puts the tax loss to the Treasury at £720,000 for every £1bn of funds domiciled offshore.

The IMA said its members provided investment management services to funds totalling approximately £456bn domiciled elsewhere and that the government would have received approximately £328m of additional tax revenue a year had those funds been domiciled in the UK.

IMA also called for an urgent resolution to the VAT treatment of investment management services provided by UK firms to offshore funds, so UK managers can continue to recover the input VAT they offer related to those services.

Richard Saunders, chief executive at the IMA, said: “We must ensure the UK's tax regime is certain, predictable, simple and, therefore, competitive. Otherwise, we could be in danger of hindering the further development of the UK as a global centre for investment management, which would, in turn, impact the UK tax-take.”

Mr Saunders said the IMA had made some progress on a number of points “thanks to open dialogue” with the Treasury and HMRC, but he asked for further progress in the pre Budget report.