In other words, instead of these bonuses being taxed at 40% as they already are, they’ll be taxed at 50%… assuming, of course, that someone getting a more than £10k bonus isn’t already going to end up in the Government’s new ultra-f**k-you band of income tax. Instead of getting£4k from a £10k bonus the state will now get £5k.
And how do they justify applying this tax to Barclays or HSBC workers? In fact, why not apply this rule to all cash bonuses?
The idea of arbitrary taxation like this, the idea that the Government will now start tweaking taxation to target people in specific companies is horrifying for me. I expect Hayek would positively explode at this one.
Thursday, 17 December 2009
Quote of the Month (Special PBR Edition)
From Charlotte Gore:
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Right there with you and Charlotte. Talk about punitive.
"Instead of getting£4k from a £10k bonus the state will now get £5k."
Not true. Assuming the bonus is over £25k (how on earth do you say what's bonus and what isn't?) and is paid this tax year, then the overall tax rate (including National Insurance) has gone up from 48% to 64%.
If you defer the bonus until after 5 April 2010, the rate goes down to 48% or 57% (depending on whether your total income is over £150k or not) with even higher marginal rates at just over £100k.
Of course everyone will pay up, surely. Deferral, really. Oh, what a cracking idea!
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