Banks to delay bonuses until April to avoid 50p income tax rate next year

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The Independent Online

Banks are looking at delaying payments of banker bonuses to take advantage of the new 45p tax band announced in the Budget.

The plans would see bonuses accrued in recent years – due to be paid in March next year – being delayed until April, when the 50p top rate of income tax will end.

Experts say deferred bonuses scheduled to be paid next year are running in "the low billions of pounds", meaning the delay could save bankers about £100m in income tax.

Banks have been in talks with advisers to discuss ways to lengthen the deferral periods since it became clear that the top rate of tax was likely to be cut, a move confirmed in last Wednesday's Budget.

Banks would be keen to pay a month later as it would allow them to tie in their top bankers for longer.