On 9 December 2009, the Chancellor of the Exchequer announced a
"bank" payroll tax on certain discretionary
"banking" bonuses paid by "banks" between 9
December 2009 and 6 April 2010. The levy is 50% of the total bonus
amount paid, although contractual amounts already agreed and
bonuses below £25,000 are not caught.
Draft legislation accompanied the announcement, but there is
considerable uncertainty as to which companies are caught by the
levy because the definition of "bank" is much broader
than might be expected. The drafting of legislation itself is
unclear on many other points too, including on what a
"bonus" actually is.
This article considers relevant issues for financial services
companies at the moment. However, there is a significant amount of
lobbying and further Treasury announcements are expected. We will
keep you informed of these as and when they are made and produce a
fuller summary when the legislation is in a more advanced form.
