Speaking to Reuters this week, the Association's director for regulation and taxation, Julie Patterson explained that other major hubs for investment funds in Europe have a more sympathetic attitude towards the market.

"The psyche of authorities in Luxembourg and Dublin is to say that the fund industry is important to GDP and they have to make sure these interests are okay," she told the news service.

Ms Patterson went on to observe that although the Financial Services Authority (FSA) has introduced reforms designed to simplify the structure of the fund market and reduce red tape by effectively splitting it into three segments of funds for the general public, sophisticated private investors, and institutions, the tax reforms relating to the new rules are lagging way behind.

"The worry about this is that it adds uncertainty where there was not (any before)...we have got to sort this out," she explained.

The IMA director also expressed concern over an Inland Revenue discussion paper which raised the possibility of treating funds like companies for tax purposes, arguing that this would significantly increase their tax burden.