100% income tax?

KTM_Gordo

Not quite, but pretty close. According to the BBC, the government is planning a 50% one-off tax on bank bonuses - which I'm sure will please the tabloid headline writers.

But the people who earn the big salaries and bonuses already pay 50% income tax, and thousands more pay the 40% rate too.

The one-off levy will be imposed on the bank rather than the individual, but the net effect will be much the same.

Whilst I can understand action being taken towards publically owned banks (RBS, Lloyds & Northern Rock), other banks that haven't needed government cash such as Barclays and HSBC are being targetted too.

Ahh well - easy targets...

lostinrates

DH pays tax on his bonus ....don't bankers?

misskool

populist move by darling that won't do much to fix the real mess. nice one labour *sigh*

beaujolais-nouveau

KTM_Gordo wrote: »

other banks that haven't needed government cash such as Barclays and HSBC are being targetted too.

Ahh well - easy targets...

My heart bleeds for them. Not. The UK is in a huge mess. Why should not the banks use "spare" money to help refloat the economy, rather than pay it to already highly paid people who take huge risks with other people's money.

Generali

From the OP's link:

the effect of the new tax, which is expected to apply to all UK banks operating in the UK including branches of foreign banks, would make it "very expensive" for banks to pay bonuses.

What do you think big international banks that can go where they want will do as a result? If it was me running one, I'd shift everyone's contract to Dublin and fly a biplane trailing a big banner saying, 'Screw you!' above Downing Street next Budget Day.

Gross gain to the Exchequer? Not much.

Net loss? Huge.

I'd not really thought that these stories about the Labour Party trying to wreck the economy deliberately so the Tories inherited an almighty mess were true. Clearly that's a silly conspiracy. Something like this has me wondering.

abaxas

Just make the use of the central bank dependent on not paying any bonuses.

Problem sorted.

Generali

abaxas wrote: »

Just make the use of the central bank dependent on not paying any bonuses.

Problem sorted.

So you'd deny profitable banks paying bonuses the ability to clear money, stop regulating them in many cases and make them unable to complete on transactions made on their own behalf and by their customers.

Either you've not thought it through, you don't really mean what you're saying or you don't know what a central bank does.

the_ash_and_the_oak

If I pay 50% tax on one thing and 50% tax on another thing do i pay 100% tax

purch

I think the idea that I (think) read in the Times the other day, that the Banks should be forced to use the Bonus Pool monies to increase their Capital, instead of paying them out of the Bank is a good concept.

Only when the Banks have an adequate capital base, and do not need any Government guarantees should they be able to have a Bonus pool.

As for Banks that do not require any assistance or guarantee from the U.K. Treasury, they should be allowed to do whatever they choose to do, within whatever rules are set out by the country where they are domiciled.

Graham_Devon

The practice of high bonuse's should just have been sorted out when the agreements for bailouts were being sorted out.

This, after all, is what we, the public, were told would happen.

It's too late for labour to start doing these things now, the chance was missed.

The_White_Horse

sobankers who now pay 50% on their bonus, will, after the announcement pay 50% on their bonus. genius labour.

unless they mean the pool will be taxed at 50%. so they will get half the bonus they were going to get, and then pay 50% on that.

Still not good enough. these people get hundreds of thousands. so instead of getting a bonus of 100k they will get 50k - how will they manage.

they should just tax any bonus amount over 5k at 95% for one year. job done.