Bankers' bonuses deferred to benefit from tax rate cut
Bonuses held back to April, when the higher rate of income tax was cut to 45%
BANKERS’ BONUSES were deferred in what appears to be a bid to take advantage of a lowering of the highest rate of income tax to 45%.
Figures released by the Office for National Statistics find that the finance and insurance industries paid a total £1.3bn in bonuses in April 2013, compared with £0.6bn a year earlier. Bonuses paid in the rest of the economy were £2.9bn this April, compared to £1.9bn in April 2012.
In 2012/13, the average private sector employee received £1,700 in bonuses, approximately six times higher than the average public sector worker’s bonus of £300. However, private sector workers are on average in receipt of lower regular pay than people working in the public sector.
April 2013 also saw the increase in the personal allowance to £9,440, another change announced in the 2012 Budget. The top rate cut affects those on incomes of more than £150,000.