TUC urges extra tax on bonuses

Pay and bonuses over £250,000 should be liable for corporation tax as part of reform of the UK's "boardroom bonus culture", the TUC has urged.

The union organisation made the suggestion ahead of announcements on bonus levels from banks in the coming weeks, which are sure to spark fresh controversy.

The TUC said that while last year's bonus tax raised significant tax revenues, making big bonuses liable for corporation tax would be a better long-term solution as it would be harder for companies to avoid and could be extended across all company boardrooms.

Other measures called for included disclosure of all pay and bonuses which were 10 times the level of average pay - currently around £25,000 in the UK.

Company remuneration committees should also be broadened to include staff representatives, and non-executive director posts should be advertised and recruited in a "transparent manner", said the TUC.

General secretary Brendan Barber said: "The millions of people faced with job losses and cuts in their living standards are rightly angry that bankers are back lining their pockets as if the recession they caused never happened.

"The Government cave-in on bonuses last week will have only increased public anger, but there is no point in blaming individual bankers for their bonuses as they are simply obeying incentives with their system. The way to end banker bashing is to fix the banking system so that it serves the wider needs of the country.

"Making mega bonuses liable for corporation tax could drive reform of our boardroom bonus culture and raise revenues so that the tax burden does not fall so heavily on low and middle income families.

"The finance sector needs reform if we are to avoid another credit bubble, but from corporate tax cuts to opposing international regulatory reform, the current Government has matched fighting talk in front of the cameras with pathetic subservience behind closed doors."