Tuesday, 15 January 2013

Mervyn condemns bank bonus ruse

The Governor of the Bank of England, Sir Mervyn King has condemned investment banks in the City of London for considering a delay in bonus payment to avoid 50% top rate tax and take advantage of the cut to 45%.

Giving evidence to MPs in the Treasury Select Committee, Sir Mervyn said it was "depressing" that people who earn so much could consider such a move, "knowing that this must have an impact on the rest of society".

He said it would be "clumsy" and "lacking in care and attention" and pointed out that financial institutions depend on goodwill from the rest of society.

It has been reported that Goldman Sachs and other investment banks have been considering plans to delay bonus payments in the UK to take advantage of the cut in top rate tax which applies from April.

What Mervyn said:
"It's clearly not unlawful. I find it a bit depressing that people who earn so much seem to think that it's
even more exciting to adjust the timing of it to get the benefit of the lower tax rate, knowing this must have an impact on the rest of society, when even now it is the rest of society that is suffering most from the consequences of the financial crisis.

"I think it would be rather clumsy, lacking in care and attention to how other people might be. And in the long run, financial institutions, like all large institutions, do depend on good will and the rest of society. They can't just exist on their own."

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