Bonus Watch '10: Bankers And Traders Working For UK Firms To Get Nada After Taxes?

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The numbers have been crunched and there's good news and less good news.

The good news is you're getting a bonus. The less good news is you don't get to keep it.

The highest paid bankers and traders in the UK and Europe who receive a bonus of £1m this year could end up receiving no money at all after tax in 2011 – and may face a tax bill that is bigger than the upfront cash part of their bonus – under current European proposals to reform remuneration. Calculations by Financial News based on the latest bonus proposals by the Committee of European Banking Supervisors show that anyone in the UK – or working for a UK bank anywhere in the world – who receives a £1m bonus would receive a maximum of £200,000 in cash upfront.

Of this, £100,000 would be payable in income tax and, depending on the nature and structure of the award, another £100,000 could be payable in tax immediately. Including national insurance, or higher marginal tax rates in some European countries, the upfront tax liability could be more than the upfront bonus.

Bonuses Go Up In Smoke [eF]

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