PLANS by Goldman Sachs executives to delay the delivery of bonuses until after April – when the top rate of tax falls – have drawn angry reactions from MPs.
The US investment bank was criticised by Westminster when it emerged bonuses could be delayed until after 6 April, when the top rate drops 50p to 45p. In all, ten banks were considering the move, but most have concluded it would be damaging, according to the Financial Times.
John Mann, a Labour member of the Treasury Select Committee, described the plans as an “opportunistic money grab”, while Labour backbencher Chris Williamson said they are an inevitable consequence of the coalition’s “inequitable” tax policies.
“The fact this represents a PR disaster for the likes of Goldman Sachs doesn’t seem to bother them,” he said. “No doubt these bankers feel their tax windfall will insulate them from public opprobrium.”
Goldman took similar steps in the US when it paid out bonuses to its ten top executives on New Year’s Eve, hours before Congress voted to raise taxes on America’s wealthiest as the ‘fiscal cliff’ deadline approached.
The investment bank paid out $65m (£39.9m) in restricted stock, narrowly avoiding the higher rate for those earning more than $400,000 per year. Such awards are usually made to the bank’s executives in January, but the awards were disclosed in filings made public on New Year’s Eve.
Public Accounts Committee chair Margaret Hodge said the latest move showed wealthy bankers “just don’t give a toss about their collective responsibility”, adding they are “the first to complain” if snow is not swept from the roads or if trains are delayed.
“They have a civic duty to pay their fair share,” she said.
Take part in this week’s Accountancy Age debate on tax avoidance by clicking here.
Making Tax Digital responses to the consultations expected in January 2017
Further corporation tax cuts and reliefs for cutting-edge tech businesses have been pledged by prime minister Theresa May, ahead of Wednesday’s Autumn Statement
The UK has not followed the global trend for reducing income tax over the past two decades
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes
HMRC receives highest number of complaints in seven years; Deloitte scoops BP and Centrica audits; and corporate reporting under the microscope in our latest Friday Afternoon Live broadcast