Comments on: Britain’s very modest surtax revenues http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Uncle_Billy http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/comment-page-1/#comment-9839 Thu, 10 Dec 2009 20:33:34 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/#comment-9839 Is it really that hard to provide the bonuses in creative ways?

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By: Ed2010 http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/comment-page-1/#comment-9830 Thu, 10 Dec 2009 17:50:37 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/#comment-9830 There’s specific provision to catch arrangements which are in effect a deferral of bonus payments until after the expiry of the tax. That’s not to say that it won’t be possible (this is a good tax to keep financial planners busy, I’m sure…) but the most blatant dodge of just deferring has been anticipated.

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By: petertl http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/comment-page-1/#comment-9826 Thu, 10 Dec 2009 17:22:53 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/#comment-9826 Beer’s right. The windfall tax only covers a part of the bonus pool.

The government’s estimate assumes that banks will reduce their bonuses. It is also a net figure – it takes into account that the government will collect less income tax because the bankers will receive lower bonuses.

So if you assume the bonus pool covered by the tax is £3 billion, then £1 billion of that goes to the government. But because bankers aren’t paying tax on that £1bn, the government also “loses” £400m. Which gives you a net figure of $600m – close to the government’s estimate.

Deferring bonuses to April, when the tax expires, would risk classed as avoidance by the authorities. And the government’s already said it will extend the tax if it thinks banks are abusing it.

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By: Beer_numbers http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/comment-page-1/#comment-9824 Thu, 10 Dec 2009 16:47:51 +0000 http://blogs.reuters.com/felix-salmon/2009/12/10/britains-very-modest-surtax-revenues/#comment-9824 The original news article says this:
“Banks will be charged a 50 percent tax rate on bonuses they pay their staff above 25,000 pounds starting today until April, a powerful disincentive for big payouts this Christmas.”

So one plausible explanation is that the bulk of all bonuses are under 25,000 pounds.

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