Darling imposes 50% tax on bankers bonuses...

Discussion in 'Current Affairs, News and Analysis' started by Bravo_Bravo, Dec 9, 2009.

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  1. Good man.

    Chancellor Alistair Darling has imposed a 50 per cent tax on all banker bonuses over £25,000.


    The Chancellor said it was only fair to impose this tax on banks who pay out more than £25,000 in individual bonuses because all UK banks have benefited from the taxpayers’ bailouts and fiscal measures.

    The move was widely predicted today and is expected to raise £0.5bn. It is a one-off levy.

    Darling also said he would put in place anti-avoidance measures to prevent banks from getting around the tax.
     
  2. Biped

    Biped LE Book Reviewer

    That's odd. Those bonuses (bearing inmind the enormous salaries the recipients are on) are already subject to the 50% tax.

    Has he, in effect announced nothing, or am I wrong?
     
  3. Smoke and mirrors dear boy, smoke and mirrors
     
  4. BiscuitsAB

    BiscuitsAB LE Moderator

    with a bit of luck he'll really screw it up and end up with double taxation which is illegal under EU law.
     
  5. HRT is 40%, chaps. Nil employee NICs at incomes over around £35k, IIRC. I bet this will hurt the HAC.
     
  6. Better not let them know about adding VAT to Fuel Tax then??
     
  7. So he's given billions of pounds to insolvent businesses on the understanding that he can have slightly more than the standard tax owed on bonuses paid to the staff back.

    Spread out to cover staff who had nothing to do with the credit markets. Only on money that's paid into an account which the inland revenue is able to audit.
    And not paid in a different currency, abroad, to some fictitious holding company.

    Or just held back on a gentleman's agreement until the govt. changes in a few months.

    I bet bankers are quaking in their boots.

    The British public aren't this stupid..

    are they ?
     
  8. [Technical Tax Pedant]Actually Hydrocarbon Oil Duty is a duty, not a tax. Hence it gets "double taxed"[/Technical Tax Pedant]



    I'm not fucking defending it, OK?!
     
  9. Oh, and Bank Payroll Tax is apparently paid by the bank directly and is in addition to the normal (presumably higher rate) Income Tax paid by the individual.
    So it's an additional tax on the banks for paying (already taxed) bonuses.

    More info:
    http://www.hmrc.gov.uk/pbr2009/pbrn2.pdf
     
  10. Biped

    Biped LE Book Reviewer

    I'm sure EU law would, given the right (French perhaps) impetous, recognise it what exactly what it is. A 'duty' being a tax under any other name, as it is levied by the government, against civilian buyers of a product, and then goes straight into government coffers - JUST like VAT.
     
  11. The bank will pay 50% tax on the bonus. The bonusee will then pay 50% income tax on what they recieve.

    Therefore a £1m bonus will cost £1.5m to the firm and net the govt £0.5m tax from firm, and £0.5m tax from individual. The individual will only get £0.5m from a bonus that would cost the bank £1.5m. (really approx figures)

    I think that will slow the bonuses down somewhat, but it all depends on the anti avoidance.
     
  12. What about the bonuses paid by banks which have never been close to insolvency and have no relationship with the British Government or tax-payers? I'm glad I had most of my bonus-loss rolled into my salary when I started my new job!
     
  13. You can read more about it here and it covers a lot more than the banks the taxpayer owns,

    http://www.hmrc.gov.uk/pbr2009/bank-pay-tech-note.pdf

    Here's how it will work, just as an example - a worker gets a bonus of £100k from which the bank or trading entity will pay £50k to the Treasury. The individual is paid £50k and then pays tax of 50% on that leaving him with £25K.

    The question then is, what reason do Goldman's, UBS, Deutsche, BOA, BNP and the rest have for staying in the UK. They're not British and HMG doesn't own any shares in them. This doesn't just affect partners at Goldman. It affects back office, junior, IT and all other admin staff for whom their bonus is a very important part of their earnings. It's a spiteful, vindictive and stupid tax which will have a detrimental impact on the City and the whole economy.

    These idiots have raped and pillaged the economy for 12 years. The thing is, many of the individuals they're targetting will just bail out. Many who can will retire or work abroad until this nonesense is over.
     
  14. there would'nt be a finanical system left if the big goverments hand'nt piled in cash.
    much easyier to make a profit when several major competitors have gone and if it all goes brown the taxpayer will pick up the pieces :x
     
  15. The whole PBR had feck all to do with what might help the economy and everything to do with electioneering. Even with the meagre leeway left after all the fiscal incontinence Darling and Brown have shown over the last couple of years he tries to buy a little bit of public opinion with an eye catching and headline grabbing announcement that will, in real terms benefit the economy by less than 0.25%.

    We are so deep in the poo that our international credit rating is severly jeopardised. The numbers that the government is dealing in are really really huge - £178 billion borrowed this last year alone - if that was paid back at £1 per second it would take 561 years to repay. He wants to borrow £700billion over the next 5 years.

    We are all going to hell in a handcart - tax the middle classes 'cos they vote tory anyway and they can safford it. Under no circumstances touch the unemployable mouth breathers on benefits 'cos they might make a fuss.

    BOHICA

    Fcuk the lot of them - i'm really really pi$$ed off.