Reply to: When are the bankers going to be punished for their failure?

[Sysman]

You haven't been paying attention in recent years. The idea that evasion is breaking the law, but avoidance is legitimately structuring your affairs so as to pay less tax legally; and so evasion is a crime but avoidance is acceptable, has been out the window for years. Avoidance is now classed as wrong, because it leads to HMRC not receiving as much tax as they expected (those are their exact words). It is now pursued too. Actions which are technically legal but are deemed by HMRC to be not what parliament intended when it drafted the law (again, their exact words), will be treated as being wrong and will be pursued aggressively.

The thing is that what parliament actually did intend in many (most? all?) cases was to encourage investment in a particular area and created tax advantages to do so.

[Tarquin Farquhar]

I've just read more about this. The banks will get hit with a one off 50% tax if they pay bonuses of more than 10k.

More worryingly the chancellor says he expects the IR to be aggressive in closing down any avoidance (evasion shirley?) schemes. Anyone want to bet there will be unintended and unforeseen consequences

You haven't been paying attention in recent years. The idea that evasion is breaking the law, but avoidance is legitimately structuring your affairs so as to pay less tax legally; and so evasion is a crime but avoidance is acceptable, has been out the window for years. Avoidance is now classed as wrong, because it leads to HMRC not receiving as much tax as they expected (those are their exact words). It is now pursued too. Actions which are technically legal but are deemed by HMRC to be not what parliament intended when it drafted the law (again, their exact words), will be treated as being wrong and will be pursued aggressively.

[EternalOptimist]

Good question EO. I am not a band-wagon jumper. I've been quietly seething about this whole casino capitalism/public sector borrowing & squandering/individuals living beyond their means/house price bubble thing for years. I was saying years ago that interest rates should have been raised so as to nip the house price bubble in the bud (even if it caused some short term pain in the form of a recession).

I guess the reason I am ranting about it now is because I have come to realise that I am very inhibited, and I've decided that it is healthier to express my feelings rather than keep them suppressed inside. I suppose "Dog's Heinous" is a vehicle for expressing my shadow-self, in the Jungian sense. There's a lot of unexpressed anger inside me, especially after what I've seen happen to this once great country over the last ten years. I've got to be careful I don't unleash a torrent of abuse at some poor unsuspecting f@1ker!


Make them pay!
Dog's Heinous
And another thing...

if what you say is true, then I tip my hat to you.
I must confess, when I heard talk of bonuses a few years ago, champagne charlies and wild excesses in the city, I weighed it up against what I knew of Gordos incompetence, the over-complexity of everything he touched, the poor decisions and poor implementation, I came to the conclusion that Bonuses were not the problem.
Gordon is the problem.


Maybe I will change that view with hindsight, but , for the moment, I still think bonuses are not the problem. Gordon is the problem, and he always was.

[Alf W]

Are the bonus's going to be double taxed - ie £100k awarded - £50k to revenue then £50k to individual who then pays personal tax on it? If not then as most of the people on big bonus's will be on 50% tax anyway surely there's no difference.

My money is on lots of Cayman Island Pineapple Growers Ltd compsanies being set up with bankers as directors and shareholders. CIPG Ltd then bills the bank for a vast amount of consultancy fees which are then paid out as dividends to the directors and shareholders.

While Hector is chasing these schemes around the globe perhaps he'll have less time to harass the likes of us.

[Dog's Heinous]

its not a revenue raising measure. Its a gimmick, a sop to an angry public.

why wern't you on here two years ago, dogs bum, mouthing off then when it wasn't fashionable?

Good question EO. I am not a band-wagon jumper. I've been quietly seething about this whole casino capitalism/public sector borrowing & squandering/individuals living beyond their means/house price bubble thing for years. I was saying years ago that interest rates should have been raised so as to nip the house price bubble in the bud (even if it caused some short term pain in the form of a recession).

I guess the reason I am ranting about it now is because I have come to realise that I am very inhibited, and I've decided that it is healthier to express my feelings rather than keep them suppressed inside. I suppose "Dog's Heinous" is a vehicle for expressing my shadow-self, in the Jungian sense. There's a lot of unexpressed anger inside me, especially after what I've seen happen to this once great country over the last ten years. I've got to be careful I don't unleash a torrent of abuse at some poor unsuspecting f@1ker!

Make them pay!
Dog's Heinous
And another thing...

[rootsnall]

its not a revenue raising measure. Its a gimmick, a sop to an angry public.

WHS.

I don't think we'll see any banker punishment until things go really pear shaped. In other words when UK plc can't borrow any more money. There is even less chance of the Toerags doing anything about it.

[EternalOptimist]

<angry tone of voice>
<jabs the air with finger for emphasis>

And another thing...

Any banksters caught mouthing off in public should be told to shut the f@!k up until they've contributed something worthwhile to society. And 'worthwhile' does not include bunging thirty grand to charity out of their tax-payer funded multi-million pound bonus!

</jabs the air with finger for emphasis>
</angry tone of voice>

What does the panel think about the one-off tax on bonuses announced today? Will this have any beneficial effect for the taxpayer or will the banksters manage to avoid it by sitting tight for a year and then paying themselves huge (undeserved) bonuses? Is it a worthwile idea? Or is it just a headline-grabbing gimmick?


Dog's Heinous
Speak your branes!

its not a revenue raising measure. Its a gimmick, a sop to an angry public.

why wern't you on here two years ago, dogs bum, mouthing off then when it wasn't fashionable?

[Doggy Styles]

This government is well known for its poorly drafted legeslation, so I expect banks to get around it.

[OwlHoot]

A brief skim of the BBC news site (cos I'm busy this morning) gave the impression the bonus limit would be the average of *all* bonuses paid by the bank - If that is so then if everyone from the cleaners up get a bonus then there's ample scope to keep the average under the limit even if the top dogs coin it with millions in bonuses. (But I may have misconstrued the proposed rules.)

edit: Nobody pulled me up on this, but it appears the limits will apply to individual bonuses. But as Doggy Styles says, the banks will wriggle out of it as easily as greased hogs!

[AtW]

I would like a tax on those who make spurious claims on internet forums.

How much, 50% of a spurious claim?

[BrilloPad]

Tax profits of banks - if they get no profits left after tax they should not be giving any bonuses.

Simples.

I would like a tax on those who make spurious claims on internet forums.

[AtW]

Which they'll then solve by bringing in more tax rules ala IR35 to make things even more complicated

Tax profits of banks - if they get no profits left after tax they should not be giving any bonuses.

Simples.

[Bunk]

Laws generally have to be quite tightly defined in what they apply to, so I would expect that's going to be easy to "account around".

Which they'll then solve by bringing in more tax rules ala IR35 to make things even more complicated

[AtW]

Seems a bit harsh on the secretaries & support staff who quite look forward to their £5k bonus each year....

They kept their jobs - otherwise if banks went bust (as they should have been) they'd be the first to lose their jobs and also it would be the hardest for them to find new one.

The biggest bonus in recession is keeping one's job.

[Moscow Mule]

Yes, the bonus pool hit by the 50% tax is made up of bonuses over £10k

Laws generally have to be quite tightly defined in what they apply to, so I would expect that's going to be easy to "account around".