Is your bonus really necessary? CIOT warns of practical problems
Responding to the announcement in the Pre-Budget Report that a banks will be subject to a ‘supertax’ on bonuses above £25,000, John Whiting, Tax Policy Director of the Chartered Institute of Taxation, said:
“This sounds like some of the wartime strictures on travelling – the Chancellor wants the banks to think hard before they pay a bonus. Any significant ones that go ahead will find something of a tax bomb en route.
“It does sounds more of a controlling measure than a tax-raising one: we need to see the detail but the obvious thought people will have is that it may be possible to sidestep the measure by waiting a year.
“The Treasury will face some major practical issues in framing this law. Defining a bonus will need a lot of care; so will defining banks – or is this a measure that could impact all businesses? That may be necessary to manage possible challenges under human rights or anti-discrimination laws. As with all tax changes there is a risk of unintended consequences.”
Notes to editors
The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.
The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its primary purpose: it is politically neutral in its work. The CIOT will seek to draw on its members’ experience in private practice, government, commerce and industry and academia to argue and explain how public policy objectives (to the extent that these are clearly stated or can be discerned) can most effectively be achieved.
The CIOT’s 14,900 members have the practising title of ‘Chartered Tax Adviser’.
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