Once again today we have had Ed telling us he is going to tax banker's bonuses, and no doubt when he confirms it a the Labour conference this week he will do so to rapturous applause. Presumably Ed is aware that these bonuses are already taxed, and at the higher rate of 42% as the recipients are not exactly minimum wage earners, although I wouldn't be completely surprised if he didn't as he does seem to be a genuine prat and not just pretending to be one.
Now, does anyone know exactly how much the total UK taxabke payout these bonuses amount to, as they seem to be the left's answer to everything from funding the health service to doubling welfare payments? Genuine question as I don't have a clue.
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Marry Red Ed's tax proposals with Yellow Nick's mansion tax and you have a partnership made in hell! Throw Pinko Cable into the mix and they will rival anything Gordy McMental added to the chronicles of ruin. Then add the Blue Labour of the Camaroons and there's a rainbow of utter incompetence.
Last edited by: Roger on Sun 30 Sep 12 at 19:17
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Hell for the bankers is OK. Remind me what it is they do with other peoples money to deserve any bonus? Economic catastrophe makers, theft, incompetence, obfuscation and swindling the public spring to mind:)
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www.bbc.co.uk/news/uk-scotland-scotland-politics-19769774
"In her speech in Edinburgh the Scottish Labour leader questioned a benefits system which sees rich people receiving tuition fees and prescriptions for free."
And who exactly pays the tax that pays these benefits?
The unemployed?
"Scottish Labour leader Johann Lamont called for an end to a 'something for nothing' culture."
Makes my pfd boil :-)
(as do people who unnecessarily swear, or try and avoid the swear filter!!
Last edited by: VxFan on Mon 1 Oct 12 at 00:49
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It's certainly not the rich, as they can pay accountants to devise unlikely schemes to avoid tax. But the end is nigh. This Government has seen the light and is recruiting more tax inspectors. Hopefully the very rich will pay more than the unemployed and low wage earners who, if they do not pay much or ndeed any, income tax, have to pay VAT, a regressive tax on low incomes. In contrast, Daily Telegraph reported that a study by HMRC showed the very rich had reduced their average income tax rate to just 10%. tinyurl.com/bmnyasr
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52% actually, since I imagine the ones there are talking about will be people earning well over £150k.
They are all loopy.
But I suspect the plan is to tax the bank as well, by at least making these bonuses non-deductible for corporation tax.
The Cleggster's mansion tax is another nutty one.
I'm feeling a bit NIMBY about tax at the moment. I was made redundant on 6th June. I've registered as self employed from July. I've earned exactly £1000 so far which, net of legitimate expenses, will be taxed at 40% +NI along with anything else I can addle in this tax year.
I haven't claimed a bean in benefits. It used to be the case that I could have set my year end at say 30 June next year and accounted for tax on my first year's business earnings at that point, taking advantage of next year's allowances and starting tax rates. Not any more, my "basis period" has to be from when I start until 5th April 2013.
Not much of an incentive to start a business instead of claiming benefits (not that I would have got more than about £3,000 total before it became means tested).
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>> I'm feeling a bit NIMBY about tax at the moment. I was made redundant on
>> 6th June. I've registered as self employed from July. I've earned exactly £1000 so far
>> which, net of legitimate expenses, will be taxed at 40% +NI along with anything else
>> I can addle in this tax year.
You must have earned shed loads between april and july then to be taxed at 40%
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>> Redundancy package?
Taxed at source if its a big one.
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Won't anything over 30 grand be treated as income for that year?
So 75 grand would put you into the 40% band for the rest of the tax year?
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I am sure manatee will come back and tell us.
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So know where you're coming from Manatee. In 2004 I was self employed but the nature of what I did was that I was paid on commission more or less 12 months retrospectively.
The company which owed me commission went bust and I effectively lost a year's pay.
I started to work pretty much straightaway with some other supplying companies but by the way of the nature of my business, they weren't going to pay me anything for a further 12 months.
I asked for state help but it was refused on the basis that I was "working" despite the fact that I'd had no income for a year and wouldn't have any for another year.
System sucks. I've never sat on my backside waiting for handouts but the very time I needed a leg up the benefits were not available to the likes of me but were freely available to wasters.
Last edited by: Humph D'Bout on Sun 30 Sep 12 at 19:44
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So, are there any figures for what bankers bonuses amount to and what labour would expect to raise should they for example tax them at eighty per cent? It looks like no-one here seems to no, and I would guess that Ed Miliband doesn't either.
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I'd imagine a hefty bonus tax would simply lead to higher salaries and smaller bonuses.
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>> So, are there any figures for what bankers bonuses amount to and what labour would
>> expect to raise should they for example tax them at eighty per cent? It looks
>> like no-one here seems to no, and I would guess that Ed Miliband doesn't either.
The Torygraph in 2009 estimated banker's bonuses at £6bn. I take that to mean investment bankers on bonuses counted in 100s of 000s, not the oompa loompas in domestic banking on the high street.
So they would pay 50% tax on that, but the corporation tax would be reduced by whatever rate x £6bn. Not that all banks are that good at paying UK corporation tax on all their profits.
I imagine Ed is visualising taxing the banks on the bonuses they pay. There wouldn't be much point trying to tax the bankers at 100%.
Grauniad articule, which makes the valid point that the bonuses are not actually a share of added value - they are just a gang of individuals managing to stick on to some of everybody else's money as it sloshes about, achived by gambling with said other persons' money with no exposure to the downside risk for themselves.
www.guardian.co.uk/business/2012/feb/05/bankers-end-big-bonuses
Last edited by: Manatee on Sun 30 Sep 12 at 20:54
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Exactly. Gambling on minute changes to trillions sloshing around in currency. And the shadow banking system,(collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. It includes entities such as hedge funds, money market funds and structured investment vehicles (SIV)), bailed out by taxpayers money, with little or no redress, in the UK. The US is different. Devised to avoid regulation, leveraged beyond belief, implicit in the creation of financial instability. “Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy – and somehow still expect to prosper. That idea was flat wrong.” en.wikipedia.org/wiki/Subprime_mortgage_crisis#cite_note-276
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>> Presumably Ed is aware that these bonuses are already
>> taxed, and at the higher rate of 42% as the recipients are not exactly minimum
>> wage earners, although I wouldn't be completely surprised if he didn't as he does seem
>> to be a genuine prat and not just pretending to be one.
But are they so taxed?
More likely deals done to conceal bonuses as capital gains or pay them through trusts in Channel Isles or Caymans or some other such place so UK tax is avoided.
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Miliband was elected to leadership post by the unions. The unions are out to bash anyone who is not one of the brothers. There is no logic in the proposals, just left wing union rhetoric.
I have no problems with bankers bonuses, merely the way they are paid. All short term, not linked to future performance or stability of deals. If you made bonuses paid on 5 years of a deals performance, there would be less short term risk employed and more on measured growth. Would certainly kill buy-out deals leveraged by chucking the purchase debt onto the purchased company.
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>>Would certainly kill buy-out deals leveraged by chucking the purchase debt onto the purchased company.
The Mighty Glasgow Rangers :-)
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Whoever is going to win the next election nothing will change.The elite will still be laughing at us.>:)
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That kinda thing. They are trying to flog the AA, which still has 4.5 billion of debt from its last buy out.
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It does seem rather odd to worry about how much tax bankers pay when Eurocrats dont pay any, at all, for reasons best known to them.
Id rather like Baroness Ashton to start paying her fair share, especially as it seems to doesnt even like going to work.
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>> Id rather like Baroness Ashton to start paying her fair share, especially as it seems
>> to doesn't even like going to work.
.........and she is unelected and she has a face like a fireman's helmet.
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Firstly, Banks are neither a charity nor a no-profit benevolent society. So the bonus of that apocryphal being, the banker, is not based upon what he does for the country, it is based upon what he does according to his goals for his company.
Secondly, they are not religious beings. They have no fervent desire to work for any particular bank. You pays your money and you takes your choice. Pay less, get less.
For example; the NHS IT project lost billions. It would not have done had it been properly managed. At its inception they spoke to me. They were asking for someone of my experience, and offering approximately 1/10th of what I would consider an acceptable base salary. My salary is relatively high, but its not as high as the billions they lost.
Pay peanuts etc. etc.
So, the problem is not the banker. It’s not his goals or his bonus. The problem is that the goals set by the shareholders are not based upon the success of a country economy.
Let just one of you honestly tell me you would not do the same if you were given the opportunity.
Lastly, of course, I would love nothing more to have a contractually agreed bonus based upon finite and recognised metrics which was then illegally withheld. Better than the lottery.
As to actual dosh, well its a lot of money, although you're still being mislead;
To give you an idea, at the absolute UK Banking top, something like £1m salary, £1m shares, £200k cash. + an awful lot of side benefits.
Give me the oppportunity and I'll do what a banker does for that money.
Last edited by: No FM2R on Sun 30 Sep 12 at 22:12
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>> For example; the NHS IT project lost billions. It would not have done had it
>> been properly managed. At its inception they spoke to me. They were asking for someone
>> of my experience, and offering approximately 1/10th of what I would consider an acceptable base
>> salary. My salary is relatively high, but its not as high as the billions they
>> lost.
You would have been absolutely barking to have taken that one on. I was called into one of the bid teams ( luckily we were rejected) I told the project team it would be a disaster and told them to note that in their diaries. Wish I had told them add a 5 quid bet each as well.
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Trouble is Zero, you know as well as I the truth of the statement "If you're not part of the solution, you can make a fortune out of the problem".
It would still have screwed up, I would have walked away snow white and richer, and it would all have begun again the next day.
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Fair enough. If I was offered a go at being a 'banker' tomorrow with the prospect of £1m bonus, I'd almost certainly have a go at it. And I wouldn't refuse the bonus.
The fact remains that they have arguably been dysfunctional in terms of creating shareholder value - the activities for which much of the bonuses were paid, that "increased" shareholder returns unsustainably created astronomical exposure to risks and resulted in Lehman et al going bust.
In the broader corporate arena, rewards at large company board level are also a bit of a 'club' activity. But the rewards are mostly smaller, as most companies don't have lots of OP's money (the 'leverage') sloshing about as well.
I'm not getting exercised about this, it just is. I have better things to do than get bitter and twisted about it.
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It is just politics of envy, politics of socialism, politics of the unelectable desperately seeking to make themselves electable.
>> Now, does anyone know exactly how much the total UK taxabke payout these bonuses amount
>> to, as they seem to be the left's answer to everything from funding the health
>> service to doubling welfare payments? Genuine question as I don't have a clue.
>>
This article gives estmated alleged figures for 2012 payouts:
www.thisismoney.co.uk/money/news/article-2142240/
In 2007/2008, the year in which the credit crunch struck and the recession began, the bonus handout was a record £11.6billion.
By 2011/12 it was down to £4.4billion, but it has almost halved to £2.3billion for 2012/13.
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>>politics of the unelectable desperately seeking to make themselves electable.
That's the gist of it.
Whoever was in opposition would be using the same drivel.
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Reminds me of the 1970s. The next election is one to lose as austerity will last a long time.
A Labour Government (or Lib Lab Coalition) would fail to take the really tough decisions - which affect the unions/their natural supporters - so it will be back to 1979 all over again.. and another decade of Conservative rule.
If the Tories win the next GE, it will because Labour have imploded. Any party with Balls as Shadow Chancellor has a credibility and competence problem. And a nasty schemer who wants to be Leader..And Unions which want to go back to the 1960s.
Last edited by: madf on Mon 1 Oct 12 at 09:39
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Manatee
You need an accountant.
Set up a company, and pay the cash out next tax year in salary (up to 6-7-8k-ish (I haven't got the current number available without looking) so as to avoid NI and use your personal allowance and benefit from NI contributions for your state pension) and dividends. That way you will access your personal allowance and 20% band for next year. And defer the tax payments.
And get yourself on the flat-rate VAT scheme (assuming your customers aren't private individuals) as that way HMRC gives you nearly 10% of your takings for free.
If you earn 20k this year which you can defer to next, then this suggestion will have saved you nearly 6k.
In terms of cost, you will have to pay £75 to incorporate a company. You may wish to pay an accountant two or three hundred to do your VAT return and Corporation Tax returns. But really you can work it out yourself in an hour or so.
Last edited by: Mapmaker on Mon 1 Oct 12 at 11:22
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Thanks for the suggestion. I'll look for one.
I was thinking I would see how it goes and work that out when I had a better idea of what I can realistically generate.
I went to a 'workshop' last week on self employment, run by an accountant. I thought I would get a clear steer, but all I got was worried about IR35!
The Class 1 NI threshold seems to be £144/week for the employer (£146 for the employee) so £7488/year - I assume you can annualise it like that and draw it all at once? No idea.
I'm trying to get some more earnings lined up so I'll have something to worry about!
Meanwhile I guess I might as well incorporate a company so it's ready?
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I don't know what you do, but if you use a company then you can probably have a considerably lower level of PI cover.
IR35 is reasonably unlikely to apply unless you have what is clearly a job, but you happen to be paid through a company.
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Banker's Bonuses - Roger.
