Senior IT workers caught in bank bonus tax crossfire
Confusion reigns in the city - so it's business as usual
Her Majesty’s Revenue & Customs has warned senior IT staff in British banks to expect to be hit by the government’s bonus tax.
The Times reports today that HMRC officials briefed bankers earlier this week about who would be affected by the government’s contentious - at least for those in the City - one-off 50 per cent levy on employers paying bonuses of more than £25,000.
High-earning IT bank workers will see tax levied on bonuses paid in the same way bankers and finance staff will be hit by the government’s plan.
However, it was less clear whether marketing, legal and accounting staff working in banks could also expect to be saddled with having to pay tax on their bonuses, according to The Times.
HMRC said bank employees doing non-banking work such as fund management and insurance would not be hit by the tax levy.
Many workers in the City have grumbled about “confusing” official guidelines on who would be affected by the government’s bonus tax.
Earlier this month Chancellor of the Exchequer Alistair Darling confirmed in his Pre-Budget report that any institutions which insist on paying substantial bonuses would face a 50 per cent tax on payments of over £25,000, payable by the bank. He expects this to bring in £500m for the government's coffers.
The Confederation of British Industry hit out at Darling's attempt to curtail bankers' bonuses and described the move as a futile headline grabbing gesture which could see financial services companies leave the UK. ®