Tesco has become the latest large UK company to bring forward the payment of its bonus, in reply to the Government’s introduction of a new 50 per cent tax rate.
The early pay-out will affect about 1,700 Tesco employees - including those with a personal income above and below £150,000 - who will receive the executive bonus. This follows both Sainsbury’s and Marks & Spencer this week announcing similar measures over bonuses. On 6 April, the tax rate on personal income higher than £150,000 rises from 40 per cent to 50 per cent.
A Tesco spokesperson said: "Our year end falls in February which is different to many other companies and so our staff cash bonuses are paid in April most years. They are being paid a few weeks early this year. Performance bonuses are an important part of our rewards package for staff including many store managers. Staff worked hard last year for their bonus and so we believe it is fair that they should be taxed at the rate which applied when the bonus was earned."
Deploying a different tactic, the investment company Hargreaves Lansdown said earlier this year it was paying a special dividend to help retail shareholders before the tax rise on April 6.Reuse content