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Contact Us Business News - January
Bank Payroll Tax
In a move designed to tackle certain remuneration practices that are considered to have contributed to ‘excessive risk taking’ in the banking industry, a temporary bank payroll tax of 50% is to apply to certain bonuses regardless of how they are paid. The tax will apply to the amount of the bonus which exceeds £25,000 for any individual employee and is applicable to banks, building societies and other related financial businesses.
The bank payroll tax will apply to all discretionary and contractual bonus awards made after the announcement of the measure on 9 December 2009, except for contractual bonus entitlements which existed at the time of the announcement, where the payer has no discretion as to the amount of the bonus. The initial charging period will run until 5 April 2010. However the government has indicated that this period of charge could be extended until other relevant provisions of the Financial Services Bill come into force.
This one-off tax is payable on 31 August 2010. It will not be deductible in calculating the institution’s profit or loss for corporation tax or income tax purposes.
Internet link: HMRC bank payroll
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