Hundreds of bankers to save average £54,000 a year through tax cut

Hundreds of millionaires working in Britain's banks will save an average of almost £54,000 when the top rate of tax is cut this weekend, according to figures compiled by the Labour party.

The changes mean that 643 bankers, each earning more than £1m, could get a combined tax cut worth at least £34.6m.

Labour's figures were derived from details of published accounts by banks showing the number of employees earning more than £1m in the past year. It is not known what proportion of these – other than the employees of HSBC – currently pay taxes in the UK.

But the figures suggest that if they received the same remuneration in the tax year that starts on 6 April, the 40 highest paid senior executives in the major UK banks would get a combined tax cut worth almost £4m – an average of £99,694 each under the coalition's plans to reduce the top rate of tax from 50p to 45p from Saturday, if they are domiciled in Britain for tax purposes.

Labour is hoping to exploit the apparent unpopularity of the tax cut for the rich by highlighting how much one of the Britain's least popular professions stands to benefit.

The coalition insists the tax cut announced in the budget last year follows research showing the 50p rate was not raising adequate revenue. They also point to the increase in the tax-free personal allowance at the bottom end of the scale as a sign of how much the coalition is doing for the ordinary taxpayer.

The Labour research suggests even bankers in the state-backed banks of RBS and Lloyds are set to get a tax cut of more than £7.5m per year – an average of £63,686 each.

The shadow Treasury minister Chris Leslie said: "People on middle and low incomes, who are paying more in higher VAT and seeing their tax credits and child benefit cut, will be totally appalled at the size of this government's tax giveaway to highly paid banking executives.

"While the average family will be £891 worse off this year because of tax and benefit changes since 2010, it cannot be right for David Cameron and George Osborne to give a huge tax cut to millionaires this weekend."

The research shows 93 employees of RBS are paid over £1m. They are set to get a combined tax cut of at least £6.2m. In Barclays, 428 millionaires will receive a tax cut worth £22m in total. At HSBC, 78 wealthy bankers are set to enjoy a tax cut of £3.1m. A further 19 millionaire bankers at Santander will receive a combined tax cut worth £807,000.

At Lloyds, 25 millionaires will enjoy a tax cut worth a total of £1,312,500.

The earnings, but not the identities of the richest bankers, are being published as part of the Project Merlin agreement between the Treasury and the banks, which include Barclays, Lloyds, RBS, HSBC and, in the context of lending, Santander.

The government made it a mandatory requirement, from 2012, for large UK banks to publish pay details of their eight highest-paid senior executive officers.

Original Article
Source: guardian.co.uk
Author: Patrick Wintour