HMRC settles city bonus row

HM Revenue & Customs is understood to have agreed to settle a row over
the avoidance of city bonuses in what has been termed a ‘generous’ settlement.

The case, which reportedly concerns nearly 50 city institutions and hundreds
of other companies, involves those responsible paying roughly half the
liability. Companies are set to pay their NICs bills but not the tax.

The deal is consistent with HMRC’s aim to never settle NICs cases at less
than the full value, but flies in the face of its uncompromising stance towards
avoidance.

Neville Bramwell, a tax partner at Deloitte, was quoted in the Financial
Times on Saturday saying that the terms of the deal were generous.

The government has introduced a range of measures to clamp down on avoidance,
pledging to clamp down on all city bonus avoidance retrospectively to last
year’s PBR where necessary. It was unclear whether or not the case pre-dated
that, however.