Bank bonus idiocy

Lordy:

A new \”super-tax\” on bank bonuses will be introduced immediately, the chancellor announced today, in an attempt to stop banks using profits to pay large bonuses to bankers.

Alistair Darling attempted to appease critics who feared the tax on bonuses would prompt defections from the City by insisting the 50% tax rate on bonuses of more than £25,000 would be paid by the banks rather than employees.

That\’s fascinating. Apparently out Chancellor believes that payroll taxes are paid by employers, not taken out of the hides of the workers.

No wonder the economy\’s fucked with ignorance like that on display.

The charge will cover bonuses awarded between 9 December 2009 and 5 April next year.

Pay \’em on April 6 th then……

Even more fun is the point that this won\’t apply to \”guaranteed bonuses\” for they of course were \”awarded\” when the contract was originally signed.

4 comments on “Bank bonus idiocy

  1. “Pay ‘em on April 6 th then”

    I thought of that too, but apparently the tax liability is on the basis of when they were awarded.

  2. I recall from my days as a tax adviser that the time of award could be debatable. Depends on the contract and the paperwork.

    If it can be arranged that the award date of bonuses is deferred, the Chancellor may have shot himself in the foot. It is my understanding that the December/January bonus season produces a significant windfall for the Revenue in January/February.

  3. Hi boss, I’d like to renegotiate my employment contract.

    OK, what do you propose?

    In the interests of the bank I am prepared to opt out of the incentive bonus scheme, which is of course something that everyone appears to want. In its place I propose a retention scheme that pays me X if I am still employed by the bank on 6th April 2010 and in good standing. You agree not to make me redundant or fire me other than for gross negligence.

    Of course there may be small print in the retroactive legislation that blocks that sort of conversation, but I’m guessing that there will be wiggle room somewhere.

  4. This is a deal done between the Government and the banks at several high level meetings over the last few weeks.

    The government win the popular vote by taking a harsh stance against the banks and win the favour of the banks (as well as not committing financial suicide) by, in practice, taxing nothing at all.

    Typical New Labour, really, all spin and no substance.

    It will doubtless gain them a few thousands of votes from the dimwits. Err, sorry, the electorate.

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