UK banks defer bonuses to beat top tax rate

Guardian – Bonuses across the economy were all but flat in the year to March 2013 – but finance payouts up 4% to £38.6bn once April figures are taken into account.  Britain’s best-paid workers delayed bonus payments worth up to £1.7bn until April to take advantage of George Osborne’s 5p cut in the top rate of tax, according to evidence collected by the Office for National Statistics.  Bonuses across the economy were all but flat in the year to March 2013, increasing by 1% compared with the same period a year ago, to £36.9bn, or an average £1,400 per employee.  But the ONS said the picture was distorted by firms deferring payouts until April, when those earning over £150,000 a year would pay income tax at 45p instead of 50p in the pound.  Payouts were £1.7bn higher in April than the same month last year, with the banking and finance sector accounting for £700m of the increase.  Some of the rise since April 2012 is likely to reflect a more generous bonus round – taking January to April together, bonuses in the finance sector were up by 13% on last year, at £10.3bn. But the ONS said businesses had reported deliberately deferring their bonus rounds so that employees could benefit from the tax cut.  If the £1.7bn had been handed over to staff before the 50p top rate was scrapped it would have brought the Treasury an extra £85m.  Read Article

Source Article from http://openyoureyesnews.com/2013/08/21/uk-banks-defer-bonuses-to-beat-top-tax-rate/

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