Tuesday, 11 January 2011

It'll be all there on the P60

Bob Diamond has today been giving evidence to a commons select committee focusing heavily on the upcoming banking bonus season.

Ching ching

He seems - from most reports - to be, frankly, fed up with the fact we're still banging on about having to give the banks all that money. After all we didn't give his bank any real cash and they've managed to make a profit in these lean times. No mean feat I'd imagine.

Bizarrely enough some DM readers agree. Take Recaf in London;

Why all the fuss? 52% of every bonus will be paid in tax (50% income tax, 2% NI), so we should be encouraging them to pay bigger bonuses if anything. The more they get, the more we get. Simple.

This seems to be the main argument for allowing the excessive payments. The recipients will pay tax on it, and because of the higher rate it will be up to 50%!

 Aside from the fact much of the bonuses will be paid in shares I find it unlikely that the cash renumeration will be going through PAYE.

Apparently these people are at the top of their game, they're unbeatable in the magic world of making money out of fresh air; so much so that if we didn't pay them lorry loads of cash they'd simply up sticks and leave for the Toblerone nirvana of Geneva. Or Singapore (Less Toblerones outside of the airport though)

If this really is the case then I think it's unlikely the money-harvesters of HMRC will be getting their full whack. They must have many a crafty trick hidden up their pin-striped sleeves in order to dodge that bullet.


Oddly another common opinion gracing the DM comments is that Tax dodging (avoiding not evading. Evading is bad) is the prudent and probably patriotic thing to do. In fact you should be in prison if you don't do it.

Is it conceivable that it's both right to take a massive bonus because you'll be paying a lot of tax on it at the same time as it's the right thing to avoid paying as much tax as you can?

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