British Government hits banks with super tax on bonuses

British Government slapped banks with a punitive one-time, fifty per cent super tax on bonuses, a move that was widely expected.

Under the new rules, banks will have to face one-time 50 per cent tax on all bonuses of more than 25,000 pounds. 

In addition, bankers who earn more than 150,000 pounds a year will have to pay income tax, which is raised from 40 per cent to 50 per cent.

According to an estimate, UK banks were preparing to pay around 6 billion pounds in bonuses by the end of this year, up by 50 per cent from last year.

But, senior banker are criticizing Government’s recent move, saying financial market would move out of London due to heavy regulations.

Speaking on the issue, an employment lawyer Jo Keddie said, “Either shareholders are going to take home less or banks are going to have to punish their employees who have done very well.”

It is worth mentioning here that Britons have been facing rising unemployment and declining services due to economic downturn and heavy bailouts.

UK banks have received an estimated 850 billion pounds in taxpayer bailout funds during the past 12-month period.