Goldman eyes tax delay on UK bonuses

Goldman Sachs is among a handful of banks considering delaying UK bonus payouts until after April 6 when the top rate of income tax falls from 50 to 45 per cent. The bank's plan, which relates to bonuses paid for performance in 2009, 2010 and 2011, rather than new awards, is expected to prove controversial despite being perfectly legal. Up until recently many banks and other large companies had been toying with the idea of delaying bonuses from their traditional payout dates in January, February and March until after the April 6 step-down in the tax rate. But the vast majority of banks have concluded in recent weeks that amid a hostile attitude towards anything that looks like tax avoidance, it would be reputationally damaging to press ahead with such a plan. About half of the top 20 banks in the City had considered delaying UK payouts, in line with Goldman's move, according to bank insiders and pay consultants. Moving bonus dates forward and back by a few weeks to optimise tax liabilities saved individuals -- and cost the government -- at least £16bn in 2010, when payouts were brought forward to avoid the new 50 per cent rate, introduced in April of that year, according to the Office for Budget Responsibility.

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