Bank Bonus Tax

[ThankU]

The UK Government Have introduced a new tax on Bank Bonuses. Any bonus over £25000 will be subject to a tax of 50% payable by the bank and not the employee. NI is to go up .5% and vat back to 17.5%.Thet are also going to introduce new tax avoidance measures.

[gazza]

Im sure thay will find a way round it thay allways do

[Cambon]

Im sure thay will find a way round it thay allways do

They already have. Firstly it is a one of tax. Secondly it is as of today. Lastly, contractual bonuses are not included (i.e. fixed amounts declared at the beginning of the contract or re-negotiation). Most banks have already declared their bonuses, so no real clawback for the government.

 

NI is up 1%, not 0.5%. That was a little unclear.

 

I thought the PBR was a waste of time. It did nothing for the economy. The economy needs action now but his public sector tax capping does not come into force until 2011. He should have raised VAT to 20% as of 01/01/10. The change from 15-20% would have brought in an estimated £25Bn.

[gazza]

yes but if thay put VAT up to 20% then people will not buy as much as it cost them a lot more. which will in turn put more pressure on the govenment because noboodys buying anything, more coompanys going bust more dole to pay etc etc.

the knock on effects of sticking 20% on is not just a clear cut case

[Slim]

It's far too early to be raising VAT to 20%, the economy isn't ready for that.

[bluemonday]

Im sure thay will find a way round it thay allways do

 

Page 6 in the Times today has some indication of the methods already underway.

[Cambon]

It's far too early to be raising VAT to 20%, the economy isn't ready for that.

You reckon? We are already years behind the rest of Europe on VAT. Vat should be put up to 20% (minimum) ASAP, and the interest rate should be put up to be at lease on par with the Euro, preferably slightly higher to attract deposits and investments from overseas. The sooner it is done the better it will be for the economy in the long term. In the short term it will hurt whether they did that or not.

[macmannin]

Isnt the UK banks funded by the taxpayer?Therefore isnt this tax on bonuses that is to be paid by the banks ,tax payers money already?

[La_Dolce_Vita]

I thought the PBR was a waste of time. It did nothing for the economy. The economy needs action now but his public sector tax capping does not come into force until 2011. He should have raised VAT to 20% as of 01/01/10. The change from 15-20% would have brought in an estimated £25Bn.

Why do you favour VAT going up? It is an unprogressive tax that will most severely hit those most affected by the financial crisis. What about raising income tax? Is that feasible?

 

I do think this bonus tax is largely a reaction to public disapproval of the fact that some of these bankers receive far too much in salary and bonuses. It is something to keep the public relatively satisfied that SOMETHING is being done. But in the greater scheme of things with a some more regulation of the private sector that will inevtiably come it is 'business as usual'.

[Cambon]

Isnt the UK banks funded by the taxpayer?Therefore isnt this tax on bonuses that is to be paid by the banks ,tax payers money already?

Exactly!

 

Dear tax payer,

 

I am going to shaft you left right and centre with stealth taxes. I am going to lie to you, and try to dupe you into re-electing labour. I am going to continue to bash the banks for a month or so yet until I need them to turn around. Also, by bashing the banks I can deflect attention from the 20-30% pay raises I am giving the NHS top brass, whilst nurses and junior doctors are on pay freezes.

 

Around February/March time, expect a sudden turn in the economy and a change from recession to growth. At around the same time the banks are suddenly going to declare a return to profitability. Gordon the moron, and I, Unibrow, will be trying to take full credit, and we will be boasting about how we saved the country.

 

Thank you for paying for Gordon's and my continual cock ups over the past decade or so. Your support has paid for my third house in teh country.

 

Love

 

Ali Bongo.

[Cambon]

Why do you favour VAT going up? It is an unprogressive tax that will most severely hit those most affected by the financial crisis. What about raising income tax? Is that feasible?

The taxes he has introduced will hit the same people for at least as much, but by stealth.

[pongo]

the interest rate should be put up to be at lease on par with the Euro, preferably slightly higher to attract deposits and investments from overseas

 

Interest rates is not something which central banks or govts have very much say over. In theory yes but it in reality it is dictated by the markets. If the markets do not think the policy is credible then it quickly becomes unsustainable.

[bluemonday]

I do think this bonus tax is largely a reaction to public disapproval of the fact that some of these bankers receive far too much in salary and bonuses. It is something to keep the public relatively satisfied that SOMETHING is being done. But in the greater scheme of things with a some more regulation of the private sector that will inevtiably come it is 'business as usual'.

 

It's also public peception that the current financial woes can be laid at the doors of the Banking industry. Bearing in mind that the banks had to be bailed out by the taxpayer, a tax on bonuses will ( I suspect they think ) please the electorate in general - also with an eye to the next election.

 

Not that it will help them win.

[La_Dolce_Vita]

Isnt the UK banks funded by the taxpayer?Therefore isnt this tax on bonuses that is to be paid by the banks ,tax payers money already?

Exactly!

 

Dear tax payer,...

 

 

They are tax payers who will be hit by the tax, but there are specific tax payers - those that work in banks.

Now I haven't read much into the background of this yet. Tax bonuses of the majority of staff is wrong because such people don't have any control or power within the company. However, it would appear to me to be a different matter for those far higher up in the company who do make such grand strategic decisions and receive massive salaries and outrageous bonuses, sometimes even when their decisions have resulted in calamity.

 

But it is all a bit of a silly exercise. From what I understand, you can't make the banks 'pay' for the damage they have wrought by the staff or the bank pay more. The costs will be offloaded onto the public in the end.

 

The problem is to prevent the finance industry and corporations placing risk onto the greater public, as they do.

[La_Dolce_Vita]

It's also public peception that the current financial woes can be laid at the doors of the Banking industry.

It is largely the banking industry, but it is the whole finance industry as a whole.