By Laurence Fletcher and Sinead Cruise
LONDON, Jan 28 (Reuters) - British broker Tullett Prebon is to let some senior staff delay bonus payments until April, meaning they can benefit from a tax cut for Britain’s best paid.
Although in no way unlawful, that could be controversial at a time British politicians and voters are focused on the tax affairs of wealthy individuals and big businesses.
Tullett had agreed to defer paying some bonuses “in response to requests from a small number of staff and in order to de-risk the company from the effects of possible competitor predatory hiring,” a spokesman said in response to a Reuters report.
That means bonuses could be taxed at a rate of 45 percent rather than 50 percent for an income above 150,000 pounds ($237,000).
Earlier this month, investment bank Goldman Sachs scrapped plans to delay staff bonuses until April 6, when the new tax year starts, following criticism of the idea from Bank of England governor Mervyn King.
How much the richest pay in tax has come under great scrutiny as Britain struggles to cut its deficit and revive its economy after the credit crisis.
Tullett Prebon is run by chief executive Terry Smith, one of the best-known figures in London’s City financial district.
Last month, he reposted a blog by a colleague including the sentence “many big companies, British as well as foreign-owned, seem to regard the payment of corporation tax as an optional extra.”
Smith, who also heads fund management firm Fundsmith, said the blog post by Tim Morgan “deserves wider circulation” without making further comment.
Smith himself did not respond to requests for comment on the Reuters report.
According to Tullett’s latest annual report, Smith received a bonus of 3.38 million pounds for 2011, split equally between cash and money that had to be invested in Tullett’s shares. That was on top of a salary of 650,000 pounds.
If the same bonus were taxed in full at 45 percent rather than 50 percent, the amount saved could be 169,000 pounds.
Earlier this month, Bank of England Governor Mervyn King said he found it “a bit depressing” that the highest earners should try to adjust the timing of bonuses to pay less tax at a time the rest of the country was suffering the consequences of the global financial crisis.