Senior IT workers caught in bank bonus tax crossfire
Confusion reigns in the city - so it's business as usual
Posted in Management, 17th December 2009 11:32 GMT
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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. ®
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COMMENTS
Doesn't matter...
.....what job they do - if they work for a bank they have, in the past, profited from the near-crimninal practices that caused this mess in the first place.
They profit from it = they pay for it.
Simples.
And forgive me if I don't shed a tear for people whose bonuses exceed my entire annual wage. They should count themselves lucky. The money-grabbing twats.
Urmmm, let me see.
Financial organisations in the UK can jolly well clear off straight away if they wish.
Truth be told the only reason they are located in the UK is for its -ahem- "beneficial" Nelsonian approach of turning a blind eye.
To put it bluntly: be jolly good organisations and sod off quietly as soon as you've paid your debts?
As if.
I run the entire IT setup for my employer (by myself, since the last round of redundancies) and I don't get 25,000 salary, let alone a bonus. My bonus this year will be to still have a job come Jan the first.
If any of those Bank IT staff want to resign in protest, I'll be happy to do their job...
@Heh AC
It's also like buying milk from Tesco (or other large supermarkets) making the purchaser responsible for the death of dairy farmers.
(For those who don't know - dairy farmers have an alarming suicide rate due to the supermarkets refusing to pay a fair amount of money for their product. Tesco even have the gaul to put milk which costs more, giving more money to the farmers, next to the stuff they won't pay a fair price for. Nice.)
Why?
Seems to me the whole bonus idea is flawed: if you are paid well, should you not be doing your job properly anyway? If doing it exceptionally well, should that not be reflected in a pay rise or promotion? The idea that, "ooh! You did what you are paid for, you should get some more! ", is extraordinary when one reflects that most people do not get this perk and that the less one is paid, the less likely one is to be in such a system, no matter how hard one works.
So, get rid of bonuses or reduce the pay by the equivalent; high pay and high bonus is unjustifiable. They've been paid, well; earn it or take less pay.
(I am in a bank and get bonuses, most of the time).
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