British bankers may start to see holes being shot into their bonus payments after a Supreme Court ruling. The nation’s top court has opted to side with HM Revenue & Customs by agreeing that taxes could not be avoided when using a special scheme to award employees rewards in shares.
UBS and Deutsche Bank had set up schemes to pay their bankers discretionary bonuses in redeemable shares in offshore companies. The share awards could be withdrawn under certain conditions, so that the payments qualified for income tax and national insurance exemptions.
However, the consistently astute HMRC, has calculated that the setup was designed to avoid around £135m in tax. Although the Court of Appeal, in a previous ruling had opted to side with the banks, the Supreme Court has chosen to reverse the decision.
Naturally emboldened by the ruling, HMRC said that it now plans to chase a further £30m in taxes from 27 other similar schemes.