| In a move designed to
tackle certain remuneration practices that
are considered to have contributed to
‘excessive risk taking’ in the banking
industry, a temporary bank payroll tax of
50% is to apply to certain bonuses
regardless of how they are paid. The tax
will apply to the amount of the bonus
which exceeds £25,000 for any individual
employee and is applicable to banks,
building societies and other related
financial businesses.
The bank payroll tax will apply to all
discretionary and contractual bonus awards
made after the announcement of the measure
on 9 December 2009, except for contractual
bonus entitlements which existed at the
time of the announcement, where the payer
has no discretion as to the amount of the
bonus. The initial charging period will
run until 5 April 2010. However the
government has indicated that this period
of charge could be extended until other
relevant provisions of the Financial
Services Bill come into force.
This one-off tax is payable on 31
August 2010. It will not be deductible in
calculating the institution’s profit or
loss for corporation tax or income tax
purposes.
Internet link:
HMRC bank payroll |
