Barclays, HSBC, RBS and Lloyds are paying themselves £5.5bn in bonuses this year. How much is that? About a penny and a half off the income tax,
Those bonuses will be taxed at 45 p in the £, plus a couple of percent employees’ national insurance plus near 14% employers’ national insurance. Call it 55% or so all round.
If that cash were not paid out as bonuses it would, assuming it stayed in the banks themselves, be taxed at 26% corporation tax. We thus get, roughly speaking, 30% of the total sum as tax as a result of it being paid as bonuses. So, again roughly, precisely and exactly because this wonga is paid out as bonuses income tax rates for the rest of us are half a penny lower.