The chancellor will levy a one-off tax on the billions of pounds set aside by banks to pay bonuses in his pre-Budget report in an attempt to highlight the government’s tough response to public anger over bankers’ remuneration.
The chancellor will levy a one-off tax on the billions of pounds set aside by banks to pay bonuses in his pre-Budget report in an attempt to highlight the government’s tough response to public anger over bankers’ remuneration.
Instead of legislating for a levy on individual bankers, the Treasury has focused on the simpler and potentially legally safer route of taxing the bonus pool used by banks for staff compensation.
Alistair Darling will present the new tax as a warning that banks should think twice before they pay what the government deems to be excessive bonuses at the end of the year.
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The government’s announcement caps a week of heavy criticism of the banks and their insistence they needed to continue to pay out large bonuses to remain internationally competitive, in spite of government support for the financial system.
The tax, which the Treasury assumes will raise hundreds of millions rather than billions of pounds, is likely to be levied on the bonus pools of all banks operating in Britain, whether they are UK-based or not.
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