City bonuses soar as bankers profit from 45p tax


Bonuses jumped by £700m in the City of London in April, as bankers deferred taking them to avoid the 50p top rate of tax, official figures have revealed.

Total bonus payments in the finance and insurance industry spiralled to £1.3bn in April 2013, compared to £600 million in the same month last year. City high-flyers and other individuals on over £150,000 getting bonuses in April would have paid tax at the top 45p rate rather than 50p a month earlier.

“The reason that the bonuses have been paid in this way is a direct consequence of the Government helping people who are doing very well indeed while the overall majority of people are struggling,” said the shadow Business Secretary Chuka Umunna. But ministers have stressed that cutting the top rate to 45p is raking in more revenue for the Treasury and making Britain’s tax system more internationally competitive.

The figures were published in a study by the Office for National Statistics which showed April had seen “unusually high levels of bonus payments”, with bonuses across the whole economy up £1.7bn in April compared to a year ago. “The increase in bonus payments in April 2013 partly reflects the deferrals of bonus payments by some businesses which reported that they had chosen to pay the bonuses usually paid in March in April this year,” it said.

Bonus payments in the City were still up £200m in March 2013 to £3.7bn, the highest month in the year. Nearly three-quarters of total bonuses paid in the finance and insurance industry in 2012-13 were paid during December to March.

Total bonus payments received across the whole economy during the financial year April 2012 to March 2013 were £36.9bn, according to the ONS, an increase of 1 per cent compared with the same period in 2011-12.

The City had by far the highest bonus per employee, on average £11,900, nearly twice the next-highest, mining and quarrying at £6,700. Education and health and social work were the lowest with average bonuses of less than £100 per employee.

The average private sector worker received £1,700 in bonuses in 2012-13, more than five times the average public sector worker’s bonus of £300.

The figures came one day after a separate study by the Chartered Management Institute showed male managers earned average bonuses twice as big as those of their female counterparts in the past year. Male managers were paid an average bonus of £6,442 last year compared with £3,029 for women, on top of basic salaries almost 25 per cent bigger.

One in seven Britons ‘has no plans to retire’

One in seven people of working age do not plan to retire, according to a new survey. This figure (14 per cent) represents an increase from 12 per cent in 2012 and 10 per cent in 2013, and is the highest proportion since the Barings’ annual study began in 2008.

The poll also found that, despite nearing the traditional retirement age, 34 per cent of 55-64 year olds – around 1.8 million people – said they did not know when they will be able to retire. Marino Valensise of Barings said: “Uncertainty is increasing.”

Matthew Moore

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Gabriel Agbonlahor, Alexis Sanchez, Alan Pardew and Graziano Pelle
footballAfter QPR draw, follow Villa vs Arsenal, Newcastle vs Hull and Swansea vs Southampton
New Articles
i100... she's just started school
ebooksAn unforgettable anthology of contemporary reportage
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
New Articles
i100... despite rising prices
Holly's review of Peterborough's Pizza Express quickly went viral on social media
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam