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06/02/2012
Ending Corporation Tax Relief Could Raise £1.7bn
Ending corporation tax relief for high pay and top bonuses could raise around £1.7bn a year if applied to the banking and financial services sector, according to a new report published on Monday.
The report by the Trade Union Congress (TUC), called Bonus Season, used data from the Labour Force Survey to show that over a third of employees earning more than £250,000 a year in the UK work in banking and finance.
The report then used HMRC data to estimate that around 81,000 people have incomes of over £262,000, 10 times average annual earnings, that come primarily from employment, including 29,000 people in banking and finance.
The report found that total pay on earnings above £262,000 - which the TUC believes should be disallowed as a deductible expense for corporation tax purposes - is around £6.8bn a year.
Ending corporation tax relief on earnings over £262,000 in the banking and finance sector would raise £1.7bn a year - vital revenues towards paying back the deficit created by the financial crash, says the TUC.
TUC General Secretary Brendan Barber said: "Scrapping corporation tax relief for earnings over £262,000 will help pay off the deficit and tackle the growing pay divide that has seen a tiny minority of super-rich individuals receive inflation and performance-busting pay rises while everyone else suffers real terms wage cuts.
"The Chancellor should use his budget to end the privileged status that the financial services sector enjoys at the expense of everyone else by announcing a this new tax on excessive pay and bonuses, as well as taking proper steps to reform our failed executive pay culture."
The report also estimates that extending the scrapping of corporation tax relief for top pay and bonuses over 10 times average earnings to all UK companies would raise around £5bn a year.
(DW)
The report by the Trade Union Congress (TUC), called Bonus Season, used data from the Labour Force Survey to show that over a third of employees earning more than £250,000 a year in the UK work in banking and finance.
The report then used HMRC data to estimate that around 81,000 people have incomes of over £262,000, 10 times average annual earnings, that come primarily from employment, including 29,000 people in banking and finance.
The report found that total pay on earnings above £262,000 - which the TUC believes should be disallowed as a deductible expense for corporation tax purposes - is around £6.8bn a year.
Ending corporation tax relief on earnings over £262,000 in the banking and finance sector would raise £1.7bn a year - vital revenues towards paying back the deficit created by the financial crash, says the TUC.
TUC General Secretary Brendan Barber said: "Scrapping corporation tax relief for earnings over £262,000 will help pay off the deficit and tackle the growing pay divide that has seen a tiny minority of super-rich individuals receive inflation and performance-busting pay rises while everyone else suffers real terms wage cuts.
"The Chancellor should use his budget to end the privileged status that the financial services sector enjoys at the expense of everyone else by announcing a this new tax on excessive pay and bonuses, as well as taking proper steps to reform our failed executive pay culture."
The report also estimates that extending the scrapping of corporation tax relief for top pay and bonuses over 10 times average earnings to all UK companies would raise around £5bn a year.
(DW)
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