back to article Senior IT workers caught in bank bonus tax crossfire

Her Majesty’s Revenue & Customs has warned senior IT staff in British banks to expect to be hit by the government’s bonus tax. The Times reports today that HMRC officials briefed bankers earlier this week about who would be affected by the government’s contentious - at least for those in the City - one-off 50 per cent levy on …

COMMENTS

This topic is closed for new posts.
  1. jon 44
    Troll

    QQ more

    Anyone getting a £25k+ bonus really shouldn't complain, they're in the top 3%, expect to get taxed.

    Personally, I can't think of a decent reason for anyone to be paid in the upper tax band anyway. Those that are usually do fuck all work and in my experience the work they do do is mediocre at best. I guess there are some superstars out there but I've yet to meet one that's not just a prima donna, ie. all fluff.

    These people get their spots by knowing the right people, not the right knowledge.

    /goes back to meh bridge.

  2. irish donkey
    WTF?

    Extra Taxes are not Fair they are part of our CORE Business as TAXPAYERS

    The rest of the Country isn't getting any bonus so why the fuck should they. I have had my wages cut by 10% due to the credit crunch they caused.

    The Banks have £175 Trillion debt to pay off. Pay that off then you can talk about bonuses.

    Somehow the Banks are claiming this isn't fair. I might remind the Bank's that charges are not fair. They don't have to be as its part of the TAXPAYERS our CORE Business

    1. Anonymous Coward
      WTF?

      Steady on

      1. Not all of the banks required bail outs, so really this has nothing to do with taxpayers' money.

      2. Current account charges matter to call centres and branches of high street banks. They don't matter in any way, shape or form to the economy as a whole.

      3. Stifling the banking industry could be a very, very dumb move in the long term, especially if it encourages top bankers/traders to move away from London.

      4. The last sentence of your post makes no sense at all.

  3. oliversalmon
    Unhappy

    Sadly not a surprise

    Despite the fact that it was credit derivatives that were the banking area that caused the crunch, this moronic government is determined to lay the blame at the feet of everyone in FS just to avoid the blame they should be getting for their large part in it.

    Sadly this is nothing new for this government or any other in history. Find a group people are envious of scared of, bankers, hedgies, foreigners etc and blame them for your own short comings.

  4. Anonymous Coward
    Anonymous Coward

    So Long, Farewell, Aufwiedersehen, Goodbye

    if they wish to leave the UK nation they should do so. There is no reason to feel any loyalty to this Nation is there. They could consider just splitting off from the UK and staying in the country, a valid move, this is meant to be a free nation and all that. So, if that is the case then you are free to leave the nation. Of course they may want sunnier climates, if they are not of tough Celtic, Scottish or Norwegian Blood, and Spain is rather nice.

    But, they shouldn't think people want them to stay or go, they are not productive in an economy beyond what others do for them or they buy, it does make them somewhat a neutral parasite hybrid but there you go, the price of freedom is often someone else's slavery.

  5. Anonymous Coward
    Paris Hilton

    Urmmm, let me see.

    Financial organisations in the UK can jolly well clear off straight away if they wish.

    Truth be told the only reason they are located in the UK is for its -ahem- "beneficial" Nelsonian approach of turning a blind eye.

    To put it bluntly: be jolly good organisations and sod off quietly as soon as you've paid your debts?

    1. Dan 10

      Be careful what you wish for...

      I'm also fairly cheesed off with the way the banks have behaved, and don't think any of the nationalised (or part thereof) banks should be handing out bonuses. Those that do ought to be rewarding responsible, rather than reckless, behaviour.

      However, as per title, be careful what you wish for on this one. Financial services is one of the biggest providers of wealth and growth across the UK. If they leave, things may get a whole lot worse....

      1. Anonymous Coward
        Grenade

        Yep London would be F***ed

        and about time too. May be then the rest of the country might be respected for what it does for UK Plc

  6. Anonymous Coward
    Grenade

    Doesn't matter...

    .....what job they do - if they work for a bank they have, in the past, profited from the near-crimninal practices that caused this mess in the first place.

    They profit from it = they pay for it.

    Simples.

    And forgive me if I don't shed a tear for people whose bonuses exceed my entire annual wage. They should count themselves lucky. The money-grabbing twats.

    1. Anonymous Coward
      Happy

      heh

      Same could be said of you paying your taxes to fund the illegal war in Iraq and the rape and murder of foreign civillians and why Jihadi terrorists see you as not innocent but part of the western infidel. Depends what you're comfortable with really.

      1. Anonymous Coward
        Anonymous Coward

        @Heh AC

        It's also like buying milk from Tesco (or other large supermarkets) making the purchaser responsible for the death of dairy farmers.

        (For those who don't know - dairy farmers have an alarming suicide rate due to the supermarkets refusing to pay a fair amount of money for their product. Tesco even have the gaul to put milk which costs more, giving more money to the farmers, next to the stuff they won't pay a fair price for. Nice.)

        1. Anonymous Coward
          Pint

          Why Tesco gets jack from me

          and the other supermarkets in shareholders hands. I shop at the Partnership.

          1. Anonymous Coward
            Anonymous Coward

            Yep

            It's JLP/Waitrose for me too. I haven't knowingly given any money to Tesco in the last five years.

  7. DI_Wyman
    Grenade

    WTF..

    ..is a bonus? We used to have a productivity bonus scheme until our productivity hit the ceiling and then it was chopped. Next we had a good attendance bonus but that was chopped when the mamagement discovered 99.9% of employees were already good attendees! So in harmony with the other contributors...don't expect a bonus if you work in the FS.

  8. Anonymous Coward
    Flame

    Why?

    Seems to me the whole bonus idea is flawed: if you are paid well, should you not be doing your job properly anyway? If doing it exceptionally well, should that not be reflected in a pay rise or promotion? The idea that, "ooh! You did what you are paid for, you should get some more! ", is extraordinary when one reflects that most people do not get this perk and that the less one is paid, the less likely one is to be in such a system, no matter how hard one works.

    So, get rid of bonuses or reduce the pay by the equivalent; high pay and high bonus is unjustifiable. They've been paid, well; earn it or take less pay.

    (I am in a bank and get bonuses, most of the time).

  9. Pandy06269
    Stop

    What's a bonus?

    I've never been given a bonus in my life - unless you can call the profit share I used to get every year working in the Co-op's IT department, which equated to an average of £100 a year.

    A £25k bonus is just short of my annual salary, so forgive me if I don't cry a river over this.

  10. Anonymous Coward
    FAIL

    For those wanting banks to leave

    Add up all the tax that they have given to the UK over the last 10 years. Now subtract the *cost* of the bailout (not the headline figure of what was handed over, but a figure of what was handed over minus what was paid back, adjusted for the cost of borrowing that money through bond issues). When you are looking at the tax, don't just look at corporation tax (financial sector provides over 25% of corporate tax take), but also look at the income tax, increase in VAT takings due to purchases by bankers, etc. Now honestly say, hand on heart, that you want all that money to go to Germany or Switzerland.

    Then when you have finished that calculation, add in all the people in London whose jobs rely on the financial services sector. Jobs in retail, restaurants, car sales. Also add in the fact that the value of people's property in London (and all the commuter belt) is linked to the demand caused by financial services. Watch what happens when the financial sector moves, demand falls and prices collapse. Yes a few scrotes can now afford a house in the south east when before they couldn't. But vast swathes of Britain will find themselves in negative equity, and a second financial crisis will follow.

    This is nothing more than a populist measure by an unpopular government hoping to avoid decimation at a forthcoming election. The hilarious thing is that, by their own figure, this measure will REDUCE the government's tax take. The City was expected to pay £6bn in bonuses. With 41% top rate tax/NI this means £2.46bn in tax. The Government have predicted a take from this tax of £500mn. Since it is a 50% tax, this means the Government expect the banks to pay out only £1bn in bonuses instead of £6bn. This means that the government gets a total of £910mn instead of £2.46bn. Invest that in your schools and hospitals.

    You shouldn't shed a tear for bankers, regardless of whether they are at fault or not (and remember that the vast majority had nothing to do with CDOs). But shed a tear for your country which is being wrecked by New Labour's scorched earth policy for their final year in office.

    1. Anonymous Coward
      Alert

      That would be unlike

      the eighties with the Cons' scorched earth policy that started almost as soon as M got into power and you want them back in. Oh and it was that lot that created a chunk of this mess with all the hands-off banking crap. In the end it's Capitalism : it creates massive wealth and great poverty in equal measure - just look at the USA.

  11. John G Imrie

    Expect to see

    A large number of Job reorganisations happening in banks over the next two weeks as people move out of the taxed jobs to ones with slightly different names but the same responsibility and perks..

    Also expect these people to be paid for the turmoil of having to order new business cards.

  12. Perpetual Cyclist

    As if.

    I run the entire IT setup for my employer (by myself, since the last round of redundancies) and I don't get 25,000 salary, let alone a bonus. My bonus this year will be to still have a job come Jan the first.

    If any of those Bank IT staff want to resign in protest, I'll be happy to do their job...

    1. umacf24
      Thumb Up

      Why not do that?

      Banks don't pay high salaries and bonus just because they can. They are greedy people, after all.

      If you think that City IT rewards are too high, then it's your duty to even things out by getting a job there. That should increase the supply and consequently cut the rate. Your current employer might learn a valuable lesson, too.

      The only requirements are relevant skills, high quality ability, tolerance of difficulty, grotesque commuting and serious commitment to delivering the job.

      Simples.

  13. Coruscating Frenzy
    Happy

    My heart pumps purple piss in pity at your plight

    http://www.neweconomics.org/publications/bit-rich

  14. TeeCee Gold badge
    FAIL

    Ah. Bear crap, Papal religion and surprise sunrise again?

    Knee-jerk reaction by one of Gordon's Gonads* proves poorly thought out, lacks clarity and has unexpected side-effects?

    Nobody could have seen that coming.

    *The Cabinet. 'Cos they're a load of useless bollocks and like to spend their time close to the PM's arsehole, that's why.

  15. Anonymous Coward
    Anonymous Coward

    Missing the point

    It's actually the bank that will pay the tax, not the employee. The employee pays normal high rate tax, any bonuses above £25k are added together and the bank pays 50% of this total separately to the amount paid to staff, the upshot is that the individual pays their normal amount of tax.

    This is clearly a populist vote winning move on behalf of the government who are trying to make it look like they are hurting "the bankers", it won't hurt the individual but will cost the banks. The banks aren't able to just not pay bonuses because, if someone has reached their required targets for the year and isn't paid their bonus, the bank aren't paying fair or competitive pay. This then means that the banks are in breach of the companies act, which requires the board of any company to always act in the intersts of the shareholder, by not paying competitive pay they are not acting in the interest of the shareholder and will have to resign or face legal action. This is what nearly happened at RBS recently when the government suggested that they would ban RBS and Lloyds banking group from paying any bonuses. Instead the government quietly dropped their 'ban bonuses' policy and came up with this new tax on banks not bankers. If they wanted to ban bonuses, they should have nationalised the banks, so there wouldn't be any shareholders to not act in the interest of.

    People should try to realise that if you work in a bank, you're not always a banker or trader. Many people are required, IT, Security, Cleaners, Facillities management, HR, etc. etc. and they are all being tared with the same brush.

    PS Don't have a go at me for the above, I'm just saying how it is, not expressing an opinion. Almost no news organisation has bothered to properly explain how the above works, except Radio 4, gawd bless 'em.

    1. Balefire
      Thumb Down

      Missing the point, maybe

      "...if someone has reached their required targets for the year and isn't paid their bonus..."

      But the main problem is that the biggest bonuses appear to be going to the ones who caused the problems we are all having now. Why should the ones who have not performed their job properly get a bonus? They should consider themselves lucky to have a job come 1st Jan.

      1. Anonymous Coward
        Anonymous Coward

        No...

        Pretty much all of the people who caused the problems that we have now, certainly at RBOS/HBOS no longer work there. This hasn't been brilliantly covered in the news, but the boards of said banks are now hand picked by the government. Other senior staff have been removed also. Not sure about the other banks, but I believe significant resignations/sackings have taken place for those who screwed up. The people getting bonuses now are the people who are sorting out the problems.

  16. NoDosh
    WTF?

    So what about

    the poor saps who have been brought in to fix some of this mess, with bonuses paid once they deliver. They get fragged to satisfy the mawkish cry for revenge from people who know eff-all about banking?

    Bravo. Really, well done.

  17. Evil Auditor Silver badge

    Common sense, anyone?

    I absolutely understand that the general public doesn't understand why those woring in financial services who messed up the whole economy, got bailed out with tax payers money now get a bonus while other poor bastards are on the receiving ends of a pay cuts and job losses. This is so unfair! you might think. But it won't help anyone if arbitrary measures are implemented.

    With the implicit government guarantee for banks the state took over their risks. Unfortunately, those risks were transfered for free (or at least for a bargain price). That's like you paying for my car insurance.

    Now the (nulabour) government didn't want to charge the banks for the guarantees they enjoyed because (I can only guess what their demotivation was) that might shrink the banks capital, increase their leverage and risk, lower loans... Instead the (struggling nulabour and trying to be reelected) government went for the populist option. This sounds good in the ears of the aforementioned general public but is utter nonsense.

    The bonus tax can and will be easily evaded: just don't pay a bonus. Give a pay rise, hand out shares with holding period instead of cash, etc. And I suspect the government is fully aware of this but really only wants to leave a 'good' impression among its possible voters.

    EA

    (please apologise this gibberish - long since I started the single malts today)

  18. The First Dave

    untitled

    So the Gov have rushed in a measure and haven't really thought it through? No great surprise there, I would have though. I also expect that the really big banks are going to be able to find a way to work around these regulations, (maybe a monthly bonus or something), and will generally be paying out £24,999...

  19. The Vociferous Time Waster

    Don't you get it?

    The banking sector is the number one source of GDP in this country.

    The second biggest is tourism FFS.

    We need the bankers more than they need us and if anything we should be siding with them against nu labia because it was them who exacerbated the banking crisis and continue to use it as a scapegoat for their poor management of the country. We have very few profitable industries left in this country so don't let nu labia send the banking sector the same way the manufacturing industry went. For all you desktopsupporttards out there, don't feel hard done by because without the bankers you wouldn't be necessary.

  20. Andrew Foster
    WTF?

    It's alright for them ...

    Funny how when the banking industry gets threatened with a tax on their bonuses they are all up in arms. These bankers are the same people who decided it's ok to raise the interest rates on the average man in the streets credit card to maintain their profits (actually, probably more accurately their standard of living). Come on bankers, the tax is just a fee levied because the government wants to grab some of your money. Their tax is exactly the same as what you've been doing to the man on the street for a long time. Not so easy to complain about that though, is it???

  21. Dumple McWhartingcock
    Grenade

    Newsflash

    Bankers and IT bank staff, stop moaning, we don't care and would prefer the incompetence that caused this crash to leave and work in another country, this goes for the government and FSA officials too. We'd prefer you to remove the greed genes that caused this truly epic fail of fails from this already sullied pool, but since you haven't got the ability to make a good call like this please, at minimum, make your way to Scotland so you are the right side of Hadrian's wall before we cut those parasites off too.

    1. Anonymous Coward
      Anonymous Coward

      @Dumple McWhartingcock

      "...at minimum, make your way to Scotland so you are the right side of Hadrian's wall before we cut those parasites off too..."

      Sounds good to me - from my perspective north of said line. You really don't have a clue, do you?

      Oh, and it may come as a shock to some, but banks, credit card companies etc are businesses, not charities. They exist to make profits, as do all other businesses. Why do they have to be shy about it or be punished for it? If you don't like credit card interest rates here's an idea - don't use a credit card!

      But then of course you've already thought of that since you're so keen to get rid of all banks and financial services companies. You'll be clearing your mortgage before you wave them off to Scotland as well, I assume? And that car loan. Who needs them after all?

  22. Pete 43
    Pint

    100% of people polled...

    thought that other people should pay more tax

  23. Anonymous Coward
    Stop

    Pointless

    Enraged middle-England needs to wake up and realise that they are where tax revenue comes from, not people paid large salaries and bonuses. Whilst the government may get cheap popularity by taxing high earners, their revenue comes from the middle class. They just don't crow (or rather thet try to hide them) so much about the tax rises there, of which there have been many.

    1. Anonymous Coward
      Stop

      Actually factually incorrrect

      the top 1%of earners actually contribute some 25% of all income tax paid and the top 10 nearly half. Check it:

      http://news.bbc.co.uk/1/hi/magazine/8417205.stm

      1. Anonymous Coward
        FAIL

        Just income tax

        Look at NI, VAT, duty etc

        1. Anonymous Coward
          Pint

          Good point

          the greater earners probably pay more through these methods too just like first class passengers on flights subsidising cattle class

  24. Linbox
    Stop

    Avoidance is childs play

    1. Pay the bonus after 5-Apr-2010 in the new tax-year.

    2. Enjoy an enormous increase in salary for 1-month.

    3. Have your position re-classed as 'cleaner'.

    And that's just off the top of my head. I'm sure the clever bastards who get paid massive bonuses to actually dream up avoidance schemes will have designed another 27 such ideas before Mr. Darling had even sat down.

    Knee-jerk. Populist. Pointless.

  25. Inachu
    Thumb Up

    BRAVO!!!!!!!!!

    When was an IT tech awarded 25,000 pounds for just removing a virus.

    Whereas all the top executives do is talk and shake hands.

    Sometimes I wish those viruses killed those documents permanently against those who refuse to give bonuses to It techs who go out on a limb to repair files.

    1. Anonymous Coward
      Alert

      by the same token

      why I am I not paid a bonus yearly for not having a virus infect the company systems by my due diligence. May be it's just part of my job!!

  26. Anonymous Coward
    Unhappy

    poor bustards

    makes me laugh, they put up the interest rates on my credit card - to 18% and now they're making money.

    about these these bankers actually gave back to the community in lower rates and fees rather than this supposed yellowish trickle down malarkey . . .

  27. Anonymous Coward
    FAIL

    Its the lowest paid that suffer

    Its the IT workers that lose out - those in line for sub 25000 bonuses. Why? Well the banks have a bonus pot to pay the bonuses and now this additional tax. They don't want to lose their top performing traders, so they still pay them the same as they were planning to whilst cutting the bonus of the IT and other support staff to pay the tax bill. Thanks Gordon et al.

  28. Maverick
    Thumb Up

    @Dumple McWhartingcock

    too fecking right mate

    can I help with rebuilding? (obviously having made sure the one eyed one and the badger are safely north of the border)

    PS Mr Alex Salmond - give us a English a vote as well and you can have independence TOMORROW :)

  29. Maverick
    Thumb Down

    @ AC "poor bustards"

    got a new offer from my credit company today

    a 'black card' (WTF is that?)

    £250 p.a. fee and 51.8% APR - thieving ***ts

    let me see . . . an accept reply OR cross cut shredder => free bedding for the guinea pigs

    you guess !

    1. Anonymous Coward
      Anonymous Coward

      5 seconds on Google gave me...

      A black card: http://creditcardforum.com/blog/2009/05/visa-black-card-secrets-revealed/

      Noone forces you to take credit, in this case you obviously haven't, but I have got sick of people whinging that the banks are bastards because they want the credit card/self assesment mortgage paid back according to terms signed up for and they can't afford the repayments. These people (who I accept that you're not one of) never see themselfs as any part of the financial problems that there are at the moment and are often happy to bankrupt themselfs rather than pay their debts off. I do accept that the banks have given away credit far to easily in the past - it's a lot better now, with "know your customer" and sharing of data between banks - but the person taking the credit has to take some personal responsibililty.

  30. Anonymous Coward
    Grenade

    the bank will pay the tax, not the employee

    "It's actually the bank that will pay the tax, not the employee."

    Excuse me? How naive do you think the readers here are?

    It is the banks' CUSTOMERS that will end up paying the taxes, same as the customers pay for everything else that the bank pays out.

    1. Anonymous Coward
      Anonymous Coward

      Well, obviously

      It's not that I thought the people here are naive, it's just that I credit everyone with enough intelligence to understand that any tax paid by any business is ultimately covered by their customers.

      Your post just goes further to make that point that this is a badly thought out tax that tries to make the general public think that "the bankers" are being punnished, while doing nothing of the sort, bank employees see no change.

      To reiterate: The tax paid by the individual employee would be unchanged at their normal higher rate tax. The 'bonus tax' comes from the employer, ultimately from the customers.

  31. Rolf Howarth
    Alert

    Bonuses

    "Excuse me? How naive do you think the readers here are?

    It is the banks' CUSTOMERS that will end up paying the taxes, same as the customers pay for everything else that the bank pays out."

    Well, yes, of course, but that's good isn't it? The banks are businesses. They're supposed to make a profit, and pay tax on those profits. But the investment banks' customers aren't you and me on the high street, but large corporations, other banks, even foreign governments around the world. They bring billions and billions of foreign earnings to the UK and to the exchequer each year, even with last year's bailout (most of which has been paid back now) they're still HUGE net contributors to the economy.

    As for whether £25K bonuses are huge and should be stopped or not, that all depends on your point of view. There are plenty of junior to middling IT workers in the City who might be on an "£80K package", which they know will be paid as £55K basic and £20K-30K bonus at the end of the year depending on how well their bit of the bank does. That salary is what they plan their life around, their mortgage etc. is based on the expectation of an £80K salary (or rather, if they're prudent they'll base it on £75K and treat anything above that as a genuine "bonus").

    You may or may not think £75K for a good software developer is quite generous, but suddenly taking away 25 to 35% of anyone's salary because you're blaming them for something they personally have no control or involvement in is a little bit harsh in my opinion.

  32. Gordon 10 Silver badge
    FAIL

    Missing the subtleties

    So IT workers get hit with the bonus tax and the rest of the banking support staff don't? It should be everyone or no-one. Just another typical Nu-labour fuskwittery.,

  33. Anonymous Coward
    Linux

    National MAXI|MUM Wage

    While ever we have people on our streets selling The Big Issue, it seems to me to be obscene that anyone (wanker -- oops -- banker, or other) should be paid enormous sums of money.

    We have a National Minimum Wage below which it is illegal to pay. Should we not, especially in the current circumstances, introduce a National Maximum Wage, above which it is illegal to pay --- including ALL FORMS OF PAYMENT ?

    We are held to ransom by the threat that bankers might leave the country. There is more advantage to living in the UK than just high salaries, so if they fancy living in Germany, goodbye ! Others will be delighted to take their jobs --- and will soon learn to do them well enough.

    Just my thoughts for what they are worth --- I bet in a pole, more would be with me than against me!

  34. Anonymous Coward
    Paris Hilton

    The daft tw*ts

    It looks as if they are serious:

    http://news.bbc.co.uk/1/hi/business/8421312.stm

    "Give me all your money, I want it now and if you don't give me all your money I will go away and never come back"

    Can't they just sod off quietly?

    Perhaps they can pay back what they owe the country before soding off?

  35. Anonymous Coward
    Paris Hilton

    Typical innit?

    While most of the country is facing a grossly impoverished Christmas some in the finance sector want to big-it-up even more.

    Consider houses.

    Most people need a place to live. Be it family, couple, single person or something incredibly gross.

    Only our finance sector could consider making housing a reasonable part of one's investment portfolio.

    Think of the morality of that and the criminality of applying an ASBO on a troublesome teenager and letting an fund/portfolio manager off totally free.

  36. Anonymous Coward
    Paris Hilton

    Greed n Need arguments

    For myself it is not the quanity of tax paid by top 1%. Nor even that paid by top 10%.

    It is much, much simpler than that.

    Should anyone present a case along lines of

    "my greed is greater than your need"

    or

    "in order to satisfy your need first of all we must satisfy my greed"

    .

    .

    .

    then those involved should definitely not be in charge of large sums of dosh (note: other peoples dosh) and I welcome them catching the first opportunity to leave blighty as soon as corporate debts have been paid off.

    And a second point: bonus.

    Bonus is a word that sort of conjures up some image of "reward associated with work or work related outcomes".

    For all you or I know a big bank bonus might be simply on the basis of having the right family connections, gone to the right public school, insert your own stereotype here ... , manage to be very friendly with the board.

    The bankruptcy of UK seems quite well associated with paying bonus in a rather cavalier manner?

This topic is closed for new posts.

Biting the hand that feeds IT © 1998–2021