Photo: Flickr user: essygie
Goldman Sachs has a crafty, though controversial scheme, to wait until April before paying out bonuses in the UK, the Financial Times reports.The delay is a plan to lower the amount of taxes payed to the British government.
The bank is reportedly planning to wait until April 6 to pay deferred bonuses. This is due to the fact that the UK’s top tax rate (£150,000 or $240,000) will drop from 50% to 45% on that date. Deferred bonuses from 2010, 2011, and 2012 are thought to be being delayed, and other banks are now believed to be considering following Goldman’s lead — the FT says around half of the top 20 are considering it.
Predictably, the British aren’t too pleased about the plan. Even though it is completely legal, it could be expensive for the British government — one estimate suggests the government lost around £16 billion ($25 billion) when banks moved their bonus dates earlier to avoid the implementation of the 50% tax in 2010.
Independent columnist Simon English sums up the reaction to the move with a story titled “Memo to Goldman Sachs: This is (partly) why people hate you”.
Pressure is now building on George Osborne to introduce “emergency measures” to ensure banks pay the bonuses before the new tax year begins, according to the Independent.
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