BusinessCompany NewsBonus tax could rake in £2.5bn

Bonus tax could rake in £2.5bn

Forecast slashing of bonus pots failing to materialise, claims PwC

The government could be in line for a £2.5bn boost from its windfall bank
bonus tax, with many banks opting to take a one-year hit on the chin rather than
cutting bonus pots.

Fears that top staff could flee overseas if their bonuses are cut has forced
many banks to accept that there little wriggle room over chancellor Alistair
Darling’s one-off 50% tax on bonus payments over £25,000.

PricewaterhouseCoopers reward partner Jon Terry told the Daily Mail
that the Treasury may rake in far more than the forecast £550m, a figure that
assumes many banks would slash bonuses. The figure could instead rise to as much
as £2.5bn, he argues.

‘I have not had indications that big banking organisations are going to
substantially reduce their bonus pools, for one good reason, said Terry. ‘They
are operating in an international market.’

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