What will the bonus super-tax raise?

It doesn't matter how much they raise as you can be sure this Government will waste every penny on inneficient and pointless employment programmes which have been discredited for years.

I agree, it wont matter how much money is raised, it will just go to giving the MP's their undeserved payrise...£1000 per year is over a months wages for some workers, i never thought i would say that i was looking forward to Labour getting replaced.
They do not know how to look after finances

Well done Robert for at long last pointing out that we (the taxpayers) will receive huge amounts of money from these so called fat pigs. The tax payer should be delighted with these bonus payments as the amounts would have to be paid by us in tax if this did not happpen. Of course it would be foolish to believe that had the money not rolled in the Labour Government would have cut back to handle the problem. They do not use the word cut do they -just spend.

The obvious thing to do is repeat the tax next year and every year until we are back in balance. It is the patriotic duty of the rich to pay taxes just like the little people.

Unless governments around the world decide to do something about bankers bonus's and management culture then the sorry cycle will begin again. The chase for profits, jumping on bandwagons, creating bubbles, making poor lending decisions under pressure to make money and then the inevitable crash.
In addition to looking at renumeration and capital adequacy we should also reform the requirement for proper qualifications - at all levels - and quality of lending and investments. Make auditor's more responsible for doing a proper job and get the shareholders to hold the management to account.
It will never happen whilst the Banks are a part of the political gravy chain.

This comment was removed because the moderators found it broke the house rules. Explain.

This comment was removed because the moderators found it broke the house rules. Explain.

We have never been taxed, fined, penalized as much in our lives as under this government. They take the money and waste it on pointless things that to anyone with any sense can see they won't work. It's a disgrace we need someone with some business interlect running this country.

Public uprising in Greece. Iceland about to say no to a bail out. Portuguese and Spanish strikes. UK public sector strike for March 16-17th. Time for the bankers to get real. I'b be scared if I were a banker right now.

If the bankers paid income tax on their bonuses instead of the banks paying it for them, the figure would be a lot higher. As it is, it's our money they are paying us with.

Smoke and mirrors.

Well as so many seem to want to believe, if the bankers DON'T get their bonuses, the whole of Western civilisation will collapse!?

Oh look it already has collapsed. So maybe the means to obtain such bonuses should be taken away from them, (it's proven to be too destructive?)

Wise up folks!

Gee Wiz Ministers will not be taking their pay rise!

As the pay rise starts in April and they are likly only to be ministers till May thats a big sacrafice they are making!

BUT will that they will also not be taking the rise in their pension caused by the pay rise?

Bonus Taxes are IRRELEVANT!

What we need is a cap on earnings - that is the only way to satisfy the people that the bankers, who we have rescued and are still supporting, really get it.

This whole bonus tax business is a smokescreen behind which the bankers and whole financial sector will continue with business as usual. This is absolutely unacceptable.

The gutless wimps in the Labour and Tory parties are so keen to ensure that they get the kickbacks of power from these bankers that they will do nothing - this is a disgrace.

WHERE IS THE PROMISED AND NECESSARY PROPER REGULATION OF THE BANKS AND FINANCIAL SECTOR?

I know of one city firm that has given its staff the choice of a deflated bonus paid before the 5th of April or a bigger (much bigger) one paid mid April.

From the staff I know who work their most have opted for a defered bonus. These a seperate knock on effect in that by defering their bonus they are due a large TAX rebate this year because their earnings have dropped drastically and they have/had over paid their payments on account!

Another Banking Story

How Novel

In Support of GC

It is such a pity that the most able and clever people in this country spend their time thinking of schemes to avoid tax. I would rather they use their creative abilities to produce real wealth. Of course a fair proportion of this wealth would go into tax to pay for the things we all consider essential.

> PS It is something of an open secret in the City that British based bankers
> who have taken lower bonuses this year to spare the blushes and fiscal pain
> of their respective employers have been given unambiguous nods and winks
> that they'll be seen right in the next bonus round.

The letter asking the Chancellor to apply the super tax each
and every year is already in the post. Please post any more evidence
of this that you have, so we can make it stick. We've got _them_
over a barrel, for once. And if they leave our shores, it's a double bonus!

The one thing this tax will raise is the hackles of everyone who believes in fair taxation for everybody.

Yes, I think investment bankers are overpaid even before they get bonuses, but that's between them and their employers - presumably the banks feel they are worth what they are being paid, given how stingy banks can be! But that is no excuse for punitive taxation - the sole reason that any of us pays tax is to provide the government with the money it needs to provide the services the citizen cannot provide for himself. It's not about 'punishing' those who are fortunate to be in a highly-rewarded profession.

"How much will the super-tax on bonuses raise for the Chancellor?
The FT this morning says £2.5bn gross and £1.5bn net;"

Maybe Darling had best enjoy it while he can. The boss of a global recruitment firm was quoted yesterday as saying the return of a Labour govt (majority or hung) will see a mass exodus of bankers from the UK. Presumably he has his ear close enough to the ground to know his business better than you or anyone else? Some will say good riddance to banks & bankers. I would take the longer/wider view - what proportion of GDP comes from the financial sector - 8% or so? Currently we are 'Greece without the sunshine' - both spending 12% to 13% of GDP more than we are earning. What is the UK when the gap goes to 20% of GDP (after all when has there ever been a Labour govt which can control spending let alone cut it)? Paraguay without the sunshine maybe. Or possibly that is demeaning to Paraguay.

...during a brief dalliance with A Banker, i seem to recall they were mostly paid in the US, in US Dollars, outside of UK PAYE and largely under some scheme structured to avoid taxation - so whilst a tax as described may be paid by the banks, the bankers would not be feeling the pain.

As an aside, who is going to 'state the bloomin obvious', that remuneration currently paid as share options to the likes of Lloyds and RBS employees are actually the deal of the centuary come the recovery enabled by the government-backed support - i can see the headline now - "Hester's 50m payday"

A few comments

I'm glad you see a bankers nod and a wink of jam tommorow as unambiguious!

If the governments ( and oppositions) revenue predicitions were only £1bn out i'd start supporting the Arsenal, i have to say this is another bankers bonus story dressed up as a tax revenue issue.

The estimated calculation is quite flawed, e.g you do not net down vat that would have been raised if the money was paid as spending money etc

more seriously flawed is that the incremental tax is from 40% to 50% ie 10%. the £668m from the big three, if this was the incremental amount would imply bonuses of £6.7bn which we know is incorrect, i suspect the banks have been feeding you the gross figures.

An easier estimate would be the 10% of bonuses paid to uk staff which seems to me to be around 700m. not a million miles from the treasury's estimate

Why do I get the feeling that most posts on these blogs are based on someone's press release?

The amount of revenue generated by this tax is largely beside the point. To discuss it is to suggest that the bonus' on which they are based are a "good thing" because we are all (now) benefiting: and/or that the bankers are "doing their bit"!

This is nonsense. The banks are walking away with large sums of taxpayers money and giving a bit of it back: and we're supposed to be grateful? That would only begin to be reasonable if these guys were delivering something in the way of added value to the economy by their (pre-tax) activities.

Can someone tell us what that is?

The bankers will only be able to get away with this for so long. The reason they are able to at the moment is because for the average man in the street the pain of paying down the debt racked up by bailing out the banks has not really kicked in yet. Wait until the middle of next year, when peoples public services are being slashed, and their taxes are going through the roof, when the price we are all going to be forced to pay in order to keep these people in the luxury they feel they deserve finally hits home!

16. At 09:21am on 05 Mar 2010, silent-majority wrote:

"It is such a pity that the most able and clever people in this country spend their time thinking of schemes to avoid tax. I would rather they use their creative abilities to produce real wealth..."

Bankers? The most able and clever? Generally speaking, I can think of numerous things that I'm sure they can't do, impacting their ability to produce real wealth. They certainly weren't clever enough to spot the financial crisis, which leads me to, creative? You must mean destructive. The same applies to career politicians.

I predict a stonking month for tax receipts in March. Not just these banker bonuses, but many privately owned companies will be bringing forward salary payments to directors to avoid the higher tax. Especially where directors have taken pay cuts to help maintain profitability, and would otherwise be facing the double-whammy of say a 10% cut and a 10% tax rise, this is the least a company can do, subject, as ever, to cash.

I suspect Darling was smart enough to see this coming and smart enough NOT to tell Brown who would have triumphed it too soon. It will be good news for the the Chancellor who is arguably the least bad member of the most destructive government this poor country has seen in the last century.

#18. Megan wrote

"Yes, I think investment bankers are overpaid even before they get bonuses, but that's between them and their employers" (My italics.)

Your assumption that it is right and proper that nobody other than an employee and his(and it is mainly his in this case) employers can have any input into pay is highly questionable, or in a rational world it should be highly questionable.

Jungle law of the untrammelled 'Free Market' produces mostly losers and very few winners, who in the main (and definitely, in the case of bankers) take advantage of monopolies and cartels to exploit the rest of us. You appear to think that this is 'right' and the rest of us should have no say in what goes on. (You will gather that I rather fundamentally disagree.)

# 18. At 09:32am on 05 Mar 2010, Megan wrote:

> The one thing this tax will raise is the hackles of everyone who believes in
> fair taxation for everybody. Yes, I think investment bankers are overpaid even
> before they get bonuses, but that's between them and their employers

What evidence do you have about that? It looks like an act of faith to me, Megan.

On the other hand, there's plenty of evidence that high wages cause inflation, which makes the rest much poorer. For example, people in the “impoverished” North East buy their houses at at younger age that those in the “richer” South. High wages have priced the majority out of the market, and we can't go on like that, as David Cameron said.

So no, it's not “between them and their employers”. If it effects us, it's our business, and that's why we're having the clamp down on anther bolshie workforce, like we did in the 80's.

Post 15 I think Guy has given up.

If you want a big banking story what about Iceland's almost certain rejection of the deal by referendum this weekend?

Just in case Robert wasn't aware there is business being done outside of the square mile.

If we must stay on the subject of banking I would suggest the following as a simple vox pox.

"If you were given a vote, like the Icelandic people have, would you vote in favour or against the deal that the current government has offered to the UK banks as part of the bail out agreement".

Post 4, I believe that President Obama is promising something similar to what you suggest.

We should be putting these bankers on trail, not just giving them a little tap on the wrist by way of a one-off windfall tax. They have brought proverty to millions of people, caused the biggest financial collapse in half a decade, destroyed businesses and livelihoods with their dishonest, greedy practices... and we are only interested in the petty sum the treasury might obtain as compensation?

We should track down the speculators and hold them to account on MORAL charges, not say "we'll accept your imorality if you give us a few quid".

Robert
just accept the fact that there have been winners and losers in the financial crisis. Those that failed are those where risk management had no influence whatsoever. Please try to reflect on this very basic point, it is completely absent from any of your posts.
Then you can talk about bonuses etc. and whatever else the people like to read about.

It strikes me that the journalists and virtually all of the respondents on this site have actually lost sight of what this super-tax was really all about. It's primary aim was not to raise additional tax; it was a unilateral attempt by this government to try and dissuade banks, by the only means they appear to listen to, from paying undeserved bonuses which have been earned on the back of the biggest bailout of banks in history. Let's not forget that many of these same bankers who are now paying themselves fat bonuses were responsible for the finacial mess that we find ourselves in today; it was their reckless investments that obliged us to step in and bail out the banks.

If you think that's a naive view of the super-tax, then consider what impact these bonuses have had/will have on the future valuations of the UK's shares in RBS and Lloyds; if the banks' "profits" (let's not forget that some of these banks are still loss making) had been retained (as the government wanted) and reinvested, then it would follow that the valuations of the banks (and therefore their share prices) would be increased. This super-tax is, in effect, only compensating the government for the permanent long term diminution in the value of its shares as a result of the bankers taking these undeserved bonuses.

To look at the super-tax in isolation and ignore the impact of bonuses on share valuations is both blinkered and biased; what's being gained on the one hand is being lost on the other (to ignore the permanent long term diminution in the value of the bank shares as a result of these bonuses shows a lack of financial grasp).

The real losers in all of this are in fact the other, often long suffering, shareholders in the banks who aren't being compensated for the bankers' personal largesse and I'd strongly suggest that they write to the banks' CEOs to complain about their profligacy!

Some of the difference lies in the fact that guaranteed bonuses were exempted. Nice trick, especially when Hester and Diamond were taken off side on this early enough that they could deliver 'lock ins' to many staff pre the PBR. Also they bumped up basic salaries.
Interestingly, a lot of 'city' businesses - independent stockbrokers, wealth managers etc.(not a banking fuction btw) many of whom have been set up by independent enterprise and have banks as neither clients or suppliers, held no risk, prop trading etc. paid tax on profit, never taken a govt penny etc. have been caught. Nice effect that; killing British Enterprise to protect big banking.
And before the student on a bike bores start saying 'they are all part of the "system"'.
On that basis the entire population is part of the 'system'.

10. The banks do pay the bonus tax, then income tax is paid, so it is in effect a 75% tax. Plus NI. A very nice take.

Once again it is amply demonstrated that the vast majority of people in this country do not realise that the top 1% of taxpayers pay nearly 1/4 of the taxes in the UK. The top 10% of taxpayers pay 50% of the taxes, and the top 50% pay nearly 90% of taxes. Anyone would think it was the other way round, judging by the spittle flecked rants published here.

The super-tax on bonuses misses the point. Bankers don't sell cars, or iPods or hamburgers. They sell trust - you go to a bank, you give them your money and you trust that they will give it back to you when you need it. That means banks need to hire honourable people to safeguard our money. And honour doesn't come with a £1.5bn price tag. Bankers who are in any way connected to a retail bank, should not receive bonuses until their banks have paid back the direct and indirect aid they have received from taxpayers. Banking used to be an honourable profession. The FSA should ensure it becomes one again.

I have no doubt that these taxes will not raise anything like what the chancellor would hope for, the very well paid in the UK have consistantly found ways to avoid paying taxes, this not only is unjust as it makes the less well of pay more in order to sustain the economy, with most benefit going to the rich.
The Gap between the top ten percent earners to the bottom ten percent has grown enormously over the last thirty years, under both labour and tory governments. Before some jump on the bandwagon of the benefit scroungers, they should be caught and dealt with appropriatley, so should the tax cheats,the line between tax avoidance and tax evasion is very fine, some times the government should look at the morality and integrity of some tax avoidance schemes. It is not just the top ten percent earners that work hard, I know it may come as a surprise that a great many on minimum pay work very hard as well! Those on low pay can't avoid their responsiblity to tax neither should those on high earnings.

32. You are mistaking strategic error in risk management and Treasury at Management level. Not the transactional businesses. Was Northern Rock an Investment Bank? Was HBoS?
And if you want to isolate recapitalisation via 'easy money' via the bond markets, then why not isolate those departments, and who work there?
Did FX dealing, Stock broking, Credit swaps, Corporate Finance, M&A advisory, ECM etc., break the system and suck taxpayers money blah blah?
The tax payer has good value out of many of the complex and profitable functions of the big banks, particulalry the Inv banks. Many don't understand what goes on in them, so they shouldn't judge. RBS would be in a far worse state if they shut the investment banking arm down.
How come Australia, Canada, even Italy aren't in this economic mess?
I believe they have banks.

#4. At 08:30am on 05 Mar 2010, balancedthought wrote:
“The obvious thing to do is repeat the tax next year and every year until we are back in balance. It is the patriotic duty of the rich to pay taxes just like the little people.”

Do you mean that the rich have a duty to pay taxes, just like the ‘little people’ have a duty to pay taxes?

Or do you mean that the rich have a duty to pay taxes that are just like the taxes that the ‘little people’ pay?

Clearly these two assertions are different, and whereas the first is a statement about patriotic duties, the second is a statement about tax policies.

I suspect that if you gave the ‘rich’ the option to pay taxes at the same rates as the ‘little people’ they’d (a) take it like a shot; and (b) stop most tax planning activities (as it would cheaper just to pay the tax).


#10. At 08:42am on 05 Mar 2010, bill wrote:
“If the bankers paid income tax on their bonuses instead of the banks paying it for them, the figure would be a lot higher.”

What do you mean by “banks paying it for them”?

The bank levy (‘bonus tax’) is a levy on banks, not on employees. It happens to be calculated by reference to certain amounts paid to employees. In this respect it is like employer’s NIC.

The UK based employees of the banks are subject to UK income tax on their earnings. They may try to plan around it, or commit fraud to avoid it, but that’s not the “banks paying it for them”, it’s the employees not paying it at all.

The banks will, for UK based employees, in most cases withhold PAYE on salary and bonus amounts. This is not “paying it for them” any more than any other wage withholding – it’s a collection mechanism used by governments the world over to make it easier and cheaper to tax large numbers of people.


#14. At 09:09am on 05 Mar 2010, icewombat wrote:
“I know of one city firm that has given its staff the choice of a deflated bonus paid before the 5th of April or a bigger (much bigger) one paid mid April.”

The economics for the bank are compelling:

Pay £100 bonus now:
Bank pays £50 levy, employee gets £100 and pays £41 tax and NI.
Cost to bank = £150. Benefit to employee = £59. Taxes paid = £91.

Pay £120 bonus in May:
Bank doesn’t pay levy, employee gets £120 and pays £61 tax and NI.
Cost to bank = £120. Benefit to employee = £59. Taxes paid = £61.

For anyone who looked at the legislation, it was obvious that unless the government acted upon their threat to extend the levy, this was the financially logical thing for a bank to do.

Re: post number 32

You've kind of hit the nail on the head here...if shareholders in a bank were truly people who cared about excesses and profligacy the government or the common man would not have to bother about bankers being paid too much or excessive risk taking.
But shareholders do not care because they shareholders of investment banks are all part of one big happy family called the 'Financial Services Industry' where each one takes care of the other...its a classic cartel/oligrachy case based on one simple factor called personal greed.

An extra £2.5bn for the treasury, wow. That's about as much as Labour borrow every single week... On the plus side I suppose it will cover the interest on our national debt for slightly longer than that, maybe a whole month!!

Merely the tip of an iceberg, to little to late. I'm quite sure they will circumvent any existing / future nets.

"Once again it is amply demonstrated that the vast majority of people in this country do not realise that the top 1% of taxpayers pay nearly 1/4 of the taxes in the UK. The top 10% of taxpayers pay 50% of the taxes, and the top 50% pay nearly 90% of taxes. Anyone would think it was the other way round, judging by the spittle flecked rants published here."

Interesting statistics especially the bit about "the top 1% of taxpayers pay nearly 1/4 of the taxes in the UK" but have you ever actually stopped to ask what percentage of the income the top 1% of taxpayers earn?

For example, if they earned 1/4 of all the income then paying a 1/4 of all the taxes would appear reasonable, would it not?

Come back with some proper statistics, weighted for income, and then we can discuss this issue properly; otherwise stop hopping on the bandwagon of the "lets spout some spurious statistics to justify any argument we choose" brigade.

35. Zumbruk :


Yes indeed! Hurrah for the filthy rich, without whose tax monies we'd all surely starve! Although, less hurrah for the filthy rich who avoid tax like it was herpes and stuff all their money into overseas tax havens.

Which is most of them.

“I know of one city firm that has given its staff the choice of a deflated bonus paid before the 5th of April or a bigger (much bigger) one paid mid April.”

If my recollection is correct, the levy actually extends beyond 5 April and effects bonuses paid up until June/July. I stand to be corrected.

3. At 08:26am on 05 Mar 2010, tm123 wrote:

"Well done Robert for at long last pointing out that we (the taxpayers) will receive huge amounts of money from these so called fat pigs. The tax payer should be delighted with these bonus payments as the amounts would have to be paid by us in tax if this did not happpen."

The logic of this is bizzarre!!

You give me a tenner, and I give you £2 back and you are eternally grateful?

I'd love to be your financial advisor.

Did you not realise the 'bonuses earned' came about as a direct result of the devaluing of your wealth and future taxes?

There is really one born every minute...

Q:What will the bonus super-tax raise?
A:Not enough

next year the big payout politicians ringing their hands about their inability to control these maverics it's a worldwide thing we are always hearing from them, it's a good job that it's our armed forces not them in afghanistan the word courage of convictions is unlikely to be bestowed on them a collective noun toothless sheep seems appropiate

"Did FX dealing, Stock broking, Credit swaps, Corporate Finance, M&A advisory, ECM etc., break the system and suck taxpayers money blah blah?"

Maybe not. Have they benefited from "easy money"? Undoubtedly; all of these functions would have been severely affected if the major banks had been allowed to go under.

The bankers have to take collective responsibility for what happened. If the FX dealers, stock brokers etc. had taken more interest in the actions taken by some of their colleagues we might not have come to this situation. If some of these FX dealers, stock brokers etc. suffer now as a result of the actions of some of their colleagues then perhaps they'll want to be doubly sure that these same colleagues don't get out of hand again in the future. If everybody suffers then everybody has a vested interest in ensuring it doesn't happen again; that's important.

As I've pointed out before this still doesn't take into account that the tax will be deductible for corporation tax purposes so the amount taken will cause a reduction in corporation tax of 28% of the amount paid. This should be taken into account when calculating the amount raised. 28% of 2.5bn means the net take is 1.8bn.

We now run a reverse meritocracy.

Banks fail - Governments bail them out - and we pay them handsomely for it.

The plebians are grateful for the crumbs from the masters table - "for we would not be able to survive without someone telling us what to do"

Luckily those bankers know what they're doing - I mean it takes some skill to bring the entire world to the brink of Economic disaster - and then cover your tracks by moving the disaster on to the Government balance sheets

Isn't is a shame that people seem to embrace debt slavery rather than take on self responsibility.

Meanwhile those who prudently excercised personal responsibility and restraint over the last 10 years - are punished for doing so.

I'm off to buy a motorbike and ride it with no helmet on - it doesn't matter if I crash - the NHS will fix me right up all at the taxpayers expense - just like the taxpayer fixed the banks when they crashed.

18. At 09:32am on 05 Mar 2010, Megan wrote:

"Yes, I think investment bankers are overpaid even before they get bonuses, but that's between them and their employers"

...but how can their employers make an informed decision when they cannot explain where the profit comes from?

...and what about the last 2 years of 'negative profits' - did the bankers have to pay 'reverse bonuses'?

No - the banks cried like babies and the Government filled their gaping financial holes.

The whole country will find out where the bankers bonuses come from when they gat their tax code in April 2011 (assuming the election isn't before April).

....and then we start doing what the Greeks are doing....

https://news.bbc.co.uk/1/hi/business/8551227.stm

...temperature's ???

"32. You are mistaking strategic error in risk management and Treasury at Management level..."

Is that what it was? Well that's alright then; what's a few £trillion between friends!

Strategic error? That's like saying we accidently hit the fire button on all our nuclear weapons; a mere oversight. Greed simly got in the way of common sense and I, for one, am still waiting to see some of those bankers walking the Green Mile! Okay, we can miss out the execution bit but I am still waiting to see some bankers been held criminally accountable for their actions. In my opinion, the correlation between their actions and personal gain are irrefutable and leave grounds for prosecution accordingly.

They've prosecuted Madoff and the actions of a lot of these investment bankers are no different in my opinion. Cummings at HBoS and Goodwin at RBS, amongst others, should be prime candidates for prosecution here in the UK (let a court decide whether they have a case to answer for their actions).

# 35. At 12:05pm on 05 Mar 2010, Zumbruk wrote:

> The top 10% of taxpayers pay 50% of the taxes, and the top 50%
> pay nearly 90% of taxes.

So the poorest 50% can barely afford to pay any net taxes at all? We
can't go on like this can we, according to David Cameron?

It's good to have a thinkers on our side. I blame the private schools,
myself. How can we correct the greed that led to this ignominious state
of affairs? And don't give me that old rubbish about being jealous - some of
us don't have to work at all, you know.

# 43. At 12:42pm on 05 Mar 2010, TimeForChange wrote:


> Interesting statistics especially the bit about "the top 1% of
> taxpayers pay nearly 1/4 of the taxes in the UK"

He doesn't realise yet what it means. It means that the vast, vast
majority of Britons are to poor to pay net taxes! Then he
wonders why people are irate. Zumbruck will figure it out, soon.

"17. At 09:22am on 05 Mar 2010, Jacques Cartier wrote:

The letter asking the Chancellor to apply the super tax each
and every year is already in the post. Please post any more evidence
of this that you have, so we can make it stick. We've got _them_
over a barrel, for once. And if they leave our shores, it's a double bonus!"

Im not a banker but a small busniess owner and I for one do not want the bankers to leave our shores... I dont want the double bonus of having to find the 25% of ALL income tax that the top 1% of earners pay out of my income.

Do you really hate the bankers so much that you would be happy to see your income tax go up 30% just to componsate for the lost tax when the bankers leave?

PS: Don't forget Zumbruck's trick - he's including all the babies, the school kids,
the pensioners, the sick, the stay-at-home mums, the carers etc. to inflate his little list of stats. As if they could pay much tax! And if you remind him, he says your posts are "spittle flecked". Typical banker lies, damned lies and statistics, and not worthy of consideration.

What a comfort indeed!

The Super-Tax will not work. These bail-out boys are super intelligent; they will find a super, method of tax-evasion that will make most, if not all, of their profits or bonuses non-taxable e.g. delaying tax by coverting bonuses into shares.

I wish that countries would consider a tax on all financial transactions, usually called the Tobin Tax.
To hurt the super-rich one needs a super-effective tax: this means a tax on that which the super rich cannot evade = financial transactions.
In addition, this creates an audit trail so that those convoluted derivative bets and default swaps can be traced.

The country that would resist most is the United States of America where the derivative and default swap mess originated and where there is (for all intents and purposes) no banking regulations. My answer to this is: if the United States will not regulate itself, countries that financially trade with the United States must protect themselves.

The added bonus to taxpayers are:
- significant debt reduction (paid by those super-rich who do most of the financial trading)
- money (at last) for social programs and last but not least
- audit trails that can be traced and audited for little things like legality or the intentional creation of sovereign instability.

32. At 11:50am on 05 Mar 2010, TimeForChange

I agree - however...

"The real losers in all of this are in fact the other, often long suffering, shareholders in the banks who aren't being compensated for the bankers' personal largesse and I'd strongly suggest that they write to the banks' CEOs to complain about their profligacy!"

....will simply be ignored - because Joe Bloggs has no influence over the CEO's - not even all of the Joe Bloggs put together have enough of an influence.
For example Barclays takes it's steer on bonuses from it's majority shareholders - not from the small shareholder or the shareholder by proxy (through a pension fund)

It's like telling people to vote in an election - we all do it, but it never makes a difference because 'wealthy non-dom donors' are able to influence the vote far more than any individual voter.

...which neatly links back to capitalism and the whole concept of it (to accumulate capital) - because the more you accumulate, the faster you can accumulate.

33. At 11:53am on 05 Mar 2010, hootsmon wrote:

"And before the student on a bike bores start saying 'they are all part of the "system"'.
On that basis the entire population is part of the 'system'."

...yes the entire population is part of the system - but not all parts are receiving such lavish rewards for such abject failure.

But all the tax goes back to the banks on payments on the money the government is borrowing.
Why do this roundabout?

These moden banking ideas...... If only a party was out there with ideas..

Yawn!

Come on Robert - PLEASE can we have a story NOT about banks and bonuses.

35. At 12:05pm on 05 Mar 2010, Zumbruk wrote:

"Once again it is amply demonstrated that the vast majority of people in this country do not realise that the top 1% of taxpayers pay nearly 1/4 of the taxes in the UK. The top 10% of taxpayers pay 50% of the taxes, and the top 50% pay nearly 90% of taxes. Anyone would think it was the other way round, judging by the spittle flecked rants published here."

...and once again a 'Capitalist crony' forgets this is because the top 1% of the country own 23% of the UK's wealth (and that was in 2004) so to pay about a 1/4 of the tax doesn't seem so unfair now does it?

As we all know (because Millionaires keep telling us) - it's much easier to make money when you have money - getting your first million is always the hardest.

So the richer you are - the easier it gets - and that's not me saying that.

So is it really unfair to tax the rich now that they do less for more?

#43. At 12:42pm on 05 Mar 2010, TimeForChange wrote:

“have you ever actually stopped to ask what percentage of the income the top 1% of taxpayers earn?”

For income tax only (HRMC statistics for 2008/09):

The top 1% earn 13% of income and pay 24% of tax
The next 1% earn 5% of income and pay 7% of tax
The next 6% earn 15% of income and pay 19% of tax
The next 18% earn 25% of income and pay 22% of tax
The next 22% earn 20% of income and pay 15% of tax
The next 17% earn 10% of income and pay 7% of tax
The next 21% earn 9% of income and pay 5% of tax
The next 14% earn 3% of income and pay 1% of tax

Where “income” is “total income subject to income tax” and “tax” is “total income tax after allowances”.

All this really indicates is that our income tax system is relatively progressive.

This is not the case for VAT, duty or council tax, all of which are relatively regressive. It is also not the case for taxes like stamp duty, CGT and IHT, which tend to fall on the wealthy.

The results for total tax take will be significantly different.

I don’t know whether these statistics count as spurious, but I haven’t chosen an argument - I’m just spouting these statistics for the hell of it.

38. At 12:18pm on 05 Mar 2010, hootsmon wrote:

"How come Australia, Canada, even Italy aren't in this economic mess? "

Italy??????? - They are never NOT in an Economic mess.

They add about 20% to their annual GDP under the title of 'black Economy' such is the unreliability of their figures.

Would you lend a country money who owes 118% of it's GDP?

Canada isn't in much better shape than the rest of us - and Australia has benefitted from a large ex-pat workforce sending wealth back home - and their mineral / commodity industries.

The Independent is worth reading@
https://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-the-worst-thing-about-ashcroft-is-that-his-behaviour-is-legal-1916391.html

'non-doms' "this revolting behaviour is perfectly legal. The bottom 99 per cent of us pay our taxes on time and in full – while the richest have been allowed to get away with this insult. "


"Tax exiles want all the benefits of an advanced society, without paying for it to keep going. There's a technical definition for this in the natural sciences: a parasite."

then there is the following:
"The invaluable Tax Justice Network has calculated that rich individuals "avoid" £13bn a year and rich corporations £12bn. (Indeed, a third of Britain's top 700 companies haven't paid any tax at all.) That's enough to double the education budget – or to pay off Britain's entire deficit in seven years without a single dent in public spending."

I like this bit too:
"When Monaco refused to co-operate with France on tax laws, Charles De Gaulle surrounded it with troops and cut off the water supply."


The bonuses are a side show in the respect that they keep up all of us busy. Ban the bonuses, bring in a rational maximum wage and at the very same time, haul every one of the dodgers, be they company directors/boards, traders, accountants or individuals up in court, and make sure they understand that in comparison the, to a young mum taking £20 under the table is a hero. Make the act of looking for tax dodges an offence with a 40 year sentence (in a proper prison).

#50. At 1:07pm on 05 Mar 2010, tacksman wrote:
“As I've pointed out before this still doesn't take into account that the tax will be deductible for corporation tax purposes so the amount taken will cause a reduction in corporation tax of 28% of the amount paid.”

The 2009 Pre-Budget Report Note on the bank payroll tax states that:

'Bank payroll tax is not taken into consideration when calculating the bank’s profits or loss for corporation tax or income tax purposes.'

The HMRC Technical Note on the topic states that:

'No deduction may be taken into account in calculating profits or losses for the purposes of corporation tax by any company in respect of any amount paid or payable as bank payroll tax.'

These points would lead me to suspect that this tax is likely to be non-deductible for corporation tax purposes.

This story illustrates the need for banks to recognise that this financial downturn has given proof that no bank is too big to fail and the importance of good corporate governance. The problem not only rests with government spending – our corporate institutions must act responsibly too. The Jury Team are giving us a solution by proposing legislation which safeguards investor capital https://tinyurl.com/Safe-Banks

For the avoidance of doubt, the HMRC figures are for income tax taxpayers.

They only count people who pay one or more of basic rate, savings rate or higher rate income tax.

They don’t include people who don’t pay income tax.

They don’t include people who earn less than the personal allowance.
(£6,035 in the year in question)

I am sure that there are some babies, school kids, pensioners, sick people, stay-at-home mums and carers who pay income tax. These people will be included in the HMRC figures.

Similarly, I bet that there are bankers, footballers, lawyers and millionaires who don’t pay any income tax. These people won’t be included in the HMRC figures.

Finally, these figures are for income tax (a tax originally designed to be calculated by reference to income, not wealth) and compare that tax against taxable income (not wealth).

"The letter asking the Chancellor to apply the super tax each
and every year is already in the post....And if they leave our shores, it's a double bonus!"

And what happens once they've left and taken their billions worth of tax revenue with them? You and I end up paying supertax rates on our meagre earnings to make up the shortfall.

People should forget about Labours 'politics of envy' and start looking at things with a tiny hint of realism. Chase away the few that pay the most tax and the rest of us suffer even more.

#43,#64,#65 et all

The comment i would make is that the top 10% of earners in the Uk pay a tax rate of 32%, as compared to a tax rate of 46% for the lowest 10% of earners, when all taxes are taken into account. This by definition is not a progressive tax system.

I wonder what would happen if all those due to pay super tax decided that instead of giving it to Ally and Gordon to fritter aways they would put it into a high risk VC fund aimed at say, clean tech start-ups and early stage companies...

You could kick off a lot of companies for £1.5bn and that would help in rebalancing the economy.

The balloon is starting to pick up speed as it lazily circles the room.
How much longer before it goes phut?

The bankers and their government are taking more and more money from the taxpayers. But I see precious little wealth being created to back it up.

The banksters ensure they are the only show in town but in so doing they guarantee no wealth creation. And the balloon moves faster and faster and faster and

#67 CopperDolomite

spot on IMO. The last time Britian had crippling debt (ie ww2) their was a stigma attached to trying to avoid paying tax.

I have sat in so many accountant's presentations selling the idea of exploiting tax loophole's with phrases along the lines of "we believe its every individuals right to decide if they want to employ us to pay less tax", knowing all this will do will create a more and more complex and expensive tax system and the companies / people who believe this paying accountants fees for very little gain.

A simple, fair tax system, everybody abides to really would be best for all and we can all then at least attempt to move onto something more worthwhile

# 57. At 1:22pm on 05 Mar 2010, icewombat wrote:
>> "17. At 09:22am on 05 Mar 2010, Jacques Cartier wrote:

>> The letter asking the Chancellor to apply the super tax each
>> and every year is already in the post.

> Do you really hate the bankers so much that you would be happy to see
> your income tax go up 30% just to componsate for the lost tax when
> the bankers leave?

I hate the inflation they've caused. It's 4% now, and rising. Do you admire
bankers so much that your kids can't afford a house to live in?

68. At 2:16pm on 05 Mar 2010, Dr Dave wrote:
These points would lead me to suspect that this tax is likely to be non-deductible for corporation tax purposes.

Don't think so.
Bank payroll tax only kicks in on bonuses above £25k
It also does not apply to contractual entitlement at or before the time of Alasdair's smash and grab raid.
I think there will be quite a bit of Corporation Tax set off.

I'm more interested how much is going straight into pension funds tax free and then being loaned back to fund Govt at 4.25%

#67 I like this bit too:
"When Monaco refused to co-operate with France on tax laws, Charles De Gaulle surrounded it with troops and cut off the water supply."

I hope you are not suggesting we go to war over tax revenues - Monaco is not part of France but a separate country.


Where tax is concerned the duty of everybody is to obey the law. We the public do not write the law, our "honourable" MPs do that. If the very rich find entirely legal loopholes to reduce their tax bill why do we blame them for obeying the law ("rendering unto caeser...") rather than the govt for making a horlicks of the law in the first place. Indeed govt has a tradition - announce a new tax relief, for example to assist new businesses employee extra staff, within a year or so govt will start calling the new relief a loophole and then about another year later they will announce it is unacceptable tax avoidance when all that has happened is that the relief proved more popular and therefore more costly than expected.

What posters like WOTW do not want to be reminded of is the facts that when top rate income tax was reduced first to 60% and then 40% the amount of tax (and percentage of total) paid by the top 10% increased. Obviously there is a point where that no longer holds true but we have yet to find that point. Increasing top rate tax to 50% may give some people a warm comforting glow but it is not much use if the effect is to reduce total tax raised.

The Daily Mail today said the Government is borrowing £600,000,000 a day ?
That is 25 million an hour or £416,000 a minute.
At present we have a Budget Deficit of 178 Billion which will be increasing by 4.2 Billion a week.

Would someone please confirm that this is a printing error

#71. At 2:56pm on 05 Mar 2010, korat102 wrote:
"And what happens once they've left and taken their billions worth of tax revenue with them? You and I end up paying supertax rates on our meagre earnings to make up the shortfall."

Yes taxes will go up, but without all these rich people in the city other things will come down.

Ever wondered why property prices drop dramatically once you get out of the London comuter zone? Or why London is often listed as one of the most expensive places to live in the world?
It's because of the super-rich pushing prices up for the rest of us.

If they go property prices will drop so normal people can afford to buy, the cost of eating out, drinking and all leasure activities will drop in the south to more 'Northern' levels.

So even if I pay more tax, I (and most other people south of Oxford) will have a better standard of living.

Be interesting to know who pays what tax on these boards, and who goes out of their way to avoid it. Might explain a lot of the waffle on here supporting tax avoidance.

Legal or otherwise.

77. At 3:43pm on 05 Mar 2010, Alesha Soba wrote:
“Don't think so.
Bank payroll tax only kicks in on bonuses above £25k
It also does not apply to contractual entitlement at or before the time of Alasdair's smash and grab raid.
I think there will be quite a bit of Corporation Tax set off.”

The computation of the bank payroll tax is irrelevant to its deductibility, so the fact that it doesn’t apply to bonuses above £25k or to contractual bonuses is interesting, but not very helpful.

My post was in response to a post stating that the bonus payroll tax is deductible for CT purposes.

When I said “these points would lead me to suspect that this tax is likely to be non-deductible for corporation tax purposes”, it was a gentle way of pointing out that the original post was incorrect.

The fact that the bank payroll tax is not deductible for corporation tax purposes has been confirmed by HMRC in writing and set out in the draft legislation.

This legislation may change. However, whilst you might “think there will be quite a bit of Corporation Tax set off”, HMRC currently do not.

78. At 3:45pm on 05 Mar 2010, Justin150
so you don't think there is any difference between tax avoidance and tax evasion?
You need to do some studying on just what some people get up to

https://en.wikipedia.org/wiki/Tax_avoidance_and_tax_evasion
https://www.youtube.com/watch?v=2O602Q2HqtA
Remember, even the rich like to use the same services many of us ordinary people do. They'll call on the police if they get robbed, just the same as we will, they'll expect the state to keep the muggers locked up just the same as we do. Their rich corporations demand educated workforces and expect the state to pay for it, while they dodge. They make all sorts of demands on our infrastructure but have the nerve to do anything they can to duck out of it; the ultimate spongers on us.

Tax dodgers, the spongers, rotten and arrogant to their cores are not welcome.

There is no place in this society for the morally corrupt.

81. At 4:17pm on 05 Mar 2010, warwick wrote:

Be interesting to know who pays what tax on these boards, and who goes out of their way to avoid it. Might explain a lot of the waffle on here supporting tax avoidance.

Legal or otherwise.
-------------------------------------------

I guess that would be me Warwick. I go out of my way to use builders that do not charge VAT. Frankly it is not my job to check up if they should or not, I wouldn't even know how to verify their turnover and consequent liability to register for VAT. Also what money I do keep in the UK is invested in ISA's, you know, those instruments of saving that the law makers encourage everybody to use to avoid paying taxes.

So what's your point?

# 84. At 5:05pm on 05 Mar 2010, Uphios wrote:


> I go out of my way to use builders that do not charge VAT ... So
> what's your point?

My point is that criminals who advertise on the Internet that they are tax fiddlers when thier user name and location is obvious are (I'll be polite) crass.

61. WOTW.'Rewards for abject failure'
My point is that there are plenty of extremely worthy, profitable functions within banks so why shouldn't their staff be paid? Why is that rewarding abject failure?
66. Irrelevant. Their Banks haven't 'brought them down'. Commodities, so what? They didn't gear the country on the commodity..........like we have done on our earnings. Theirs were less illusory that ours, I'm sure someone as clever as WOTW could see that. Now we are throwing the baby out of with the bath water in order to satisfy electoral, ill informed outrage.
Sending some money home from a few thousand barmen helped Canada and Aus out? Get real, their currencies are stronger than ours methinks.
They have a heavy seam of Inv Banks. NAB, McQuarry, RBC etc. Why didn't they die?
Italy are in better shape than us despite their traditional woes, but the point was about banks. The banks did not bust Italy. Why?
N Rock. HBoS?
I don't work in EC, but I know that the city provides a HUGE tax take, in income and corporate tax. I know that whole depts have relocated to Paris and Frankfurt. I know that for the first time in ages Jan (biggest tax haul month)was in deficit for the first time in ages. I wonder why.
Less tax more draw. Turkeys...Christmas...

The revenues that Robert states in his blog imply that the banks are paying at least 3 times the bonuses that the Government hoped that they would. Let's not forget that the Government is a large or majority shareholder in several banks, and a guarantor of the rest. They would have preferred that these billions had stayed at the banks to strengthen their balance sheets, rather than receiving a fraction of the bonuses in taxation. Success would have been measured as lower tax revenues than forecast.

The supertax has utterly failed to deter the banks from making these absurd payments.

The system has failed, and failed in the most spectacular fashion imaginable. Yet still directors, employees and investors alike are possessed with a feverish determination to start the whole illusory wealth machine going again. I am lost for words.

WOTW. Hahahaha - just read your post again. How many billions did Aussie expats send home to bail out their banks...which errr didn't need bailing out?
Oh, and are they filthy non doms the other way round btw?
All the authority and grasp of the subject as.....oh, that bloke on the bar stool in the Dog and Duck.
See you in the Dog and Duck.
I'll have my Che Guevara T shirt on.

85. At 5:25pm on 05 Mar 2010, Jacques Cartier wrote:


My point is that criminals who advertise on the Internet that they are tax fiddlers when thier user name and location is obvious are (I'll be polite) crass.
-------------------------------------------

See, there you go again Jacques, jumping to conclusions. Thinking before you type obviously not your strong point. Now tell me, what part of ISA's do you think is illegal or what part of a builder not registering for vat do you think is illegal? Would be nice if we had a button on this blog that enabled you to switch of idioits!

So it raises £3 billion in the short term . But how many billions does the UK lose in the long term as potential high worth individuals move on to other locations.

If taxing the rich is such a success why stop at 50%,increase it to 90 % ,it will double the tax increase.

The reality is Lefty Brown is clueless in securing real investment in the UK,he believes expenditure in public sector is an actual investment?

Quality jobs and opportunities is the way forward for the UK not vast public sector expenditure with borrowed money...

I'll save you looking it up Jacques. Here it is from the HMR&C site:-

Supplying goods or services within the UK. If your turnover of VAT taxable goods and services supplied within the UK for the previous 12 months is more than the current registration threshold of £68,000, or you expect it to go over that figure in the next 30 days alone, you must register for VAT. See the section in this guide on calculating your VAT taxable turnover.

So, do you know my builders turnover exceeds the threshold? No, well of course not, how could you. So tell me, how am I to know? Like I said, thinking is not your strong point.

Post 88: Hootsman

Simple answer on how Australian banks survived the banking crisis...

... they decided not to gorge themselves on get rich scams tied into credit default swaps and over-the-counter derivatives.

[Unsuitable/Broken URL removed by Moderator]

On the subject of tax, have we already forgotten the multi-billion pound tax break gifted to RBS, so it can then pay £1.3bn in bonuses on a profit of just £1bn - in the most benign of market conditions.

Anyone here defending the these castles of greed as somehow being 'part of the system' must remember, the golden rule of 'only the fit survive' in capitalism should remember we have socialised failure in order to let these people behave as if nothing has gone wrong.

Harping the case for the free market after the fact the free market should have ensured your demise is not a logical argument - its just the one we're supposed to accept.

Bankers must be laughing at how placid we are, though I get the feeling they already know the big wave has yet to hit, so are fillingtheir pockets while they still can - at our expense!

There is no defending this behaviour, and the fact our politicians also have their snout buried deep in the trough along with these parasites merely proves corruption has won the day.

Try teaching your kids moral standards in a world where lying has become such an everyday and acceptable habit...

#83 I know exactly what people get up to I see brochures every day with new schemes, some are complete scams others are entirely legitimate.

The problem with taking a moral stance on tax avoidance is that it is very difficult to know where to stop. All of us have a duty to obey the law and the law has for many years said that arranging your affairs so you pay less tax is totally fair unless you breach a specific law. Lets take an example. I am planning a wedding. I need to buy 10 cases of champagne (my mother drinks a lot!) and 20 cases of wine. I could order it from the nearest wine wholesaler and pay UK duty and VAT or I could hir a van take the ferry to France and buy it there a lot cheaper because the French charge less VAT and duty. Now is that tax avoidance (HMRC probably believe it is) or is it simply sensible planning of your budget?

Hootsman 86 - "plenty of extremely worthy, profitable functions........"
I realise that the investment chaps have done a sterling job (or should that be a job on the sterling?)and I believe retail have somehow managed to generate decent margins(something to do with borrowing cheap money and lending to customers at much higher rates)- sheer genius.
Are you saying there even more worthy bits that we didn't know about?

1980's - red braces and porsches
1990's - "flaming ferraris"
00's - economic meltdown

Everyone else appears to have moved on!!1
After being throttled so many times the turkeys stop caring about when Christmas comes.

#83. At 4:36pm on 05 Mar 2010, copperDolomite wrote:
"so you don't think there is any difference between tax avoidance and tax evasion?
You need to do some studying on just what some people get up to"

There is a difference - avoidance is legal (and defined as such) and evasion is not (broadly, tax fraud).

They might both be odious, irresponsible, immoral and unjust, but one is legal and one is not. If you want to outlaw avoidance, you either have to:

a) introduce a GAAR; or
b) resign yourself to a regime where what tax you pay is not determined by the law.

In effect, all a GAAR does is change the boundary between what is legal and what is not. There will still be things that only the devious can do to minimise their tax liabilities that the majority find offensive.

That means that we are left only with changing to a system where the law doesn't determine what tax is due. Hmmmm...

93. At 7:06pm on 05 Mar 2010, Justin150 wrote:
Lots.

....................................

And that's the point Justin, and where this witch hunt for the bankers/traders is so wrong. Tax avoidance is legal and requires planning. If your Jacques you probably are unable to plan much at all and then feel outrage when someone who does plan appears to have an advantage. Your trip to France is a case in point, planning involved.

The bankers/traders have done nothing wrong in law, they now expect their legal contracs to be honoured. I happen to believe this is the correct way to proceed in spite of being somewhat envious of their fantastic earnings (from profits WOTW).

Another case in point on planning, kind of the reverse of your France example. Some years ago I had a partner and we used to do a bit of property developing. We had done a couple and trusted each other implicity. On one particular development we bought a house and split it into two. I worked the figures and came up with a sale price that would mean we had to pay a little CGT but not much. Imagine my surprise when we came to sell the second unit and it transpired my partner had registered the property in his name only. The effect of this was that although we had developed the property jointly the tax office refused to allow my CGT allowance as I was not part of the registered owner. We paid more tax than we should have but the tax office was applying the letter of the law. Needless to say I was not happy and ensured it never happened again but the point is it was our lack of carefull planning that caused a higher than necessary tax bill.

96. At 7:47pm on 05 Mar 2010, Uphios wrote:

"...the tax office refused to allow my CGT allowance as I was not part of the registered owner."


Did you consider a temporary civil partnership followed by a tax-free transfer, before the disposal?

(sorry :-) )

#72. At 3:11pm on 05 Mar 2010, Kudospeter wrote:

"#43,#64,#65 et all

The comment i would make is that the top 10% of earners in the Uk pay a tax rate of 32%, as compared to a tax rate of 46% for the lowest 10% of earners, when all taxes are taken into account. This by definition is not a progressive tax system."

I don't know about the exact figures (and I suspect that nobody does), but I think that you are probably correct - the rich do not, in all likelihood, pay a higher overall rate of tax than the poor. I tried to be clear in my original post as to the scope of the statistics provided.

I have found several studies relating to overall tax take, and the results vary.

I think that we should keep in mind (at least) two points. First, these are percentages, not absolute amounts of tax.

Secondly, I would suggest that just as our tax system is not progressive, our 'benefits' system (in the widest sense) is not progressive either.

However, a progressive tax system and a non-progressive benefits system are probably the hallmarks of a civilized society.

97. At 8:37pm on 05 Mar 2010, Dr Dave wrote:

Well clearly I didn't otherwise I would not have remebered the event so well!. Not that I will be in that position again but I wonder if it could have worked. Thanks for making me feel I missed a trick :-)

However, my point is that applying the letter of the law does sometimes work for the tax man as well as the banker.

99. At 8:54pm on 05 Mar 2010, Uphios wrote:

"...I wonder if it could have worked."

I'm not sure - and I didn't mean to make you feel like you missed a trick (and we all have, anyway!)


"...applying the letter of the law does sometimes work for the tax man as well as the banker."

I am strong believer that if we give up on the rule of law, we've not got much left.

Both avoiders and HMRC fight their corners as hard as they can. The courts end up taking one side or another, and seem to try to go beyond the letter of the law, if they feel that someone is beyond the pale, but at least they are (supposed to be) impartial.

Given all the candidates to decide what the law means, I think I'll stick with the courts.