January 28, 2013 / 5:25 PM / 5 years ago

CORRECTED-UK broker Tullett Prebon to let top staff delay bonuses

(Corrects that blog post referred to in paragraph 8 was not Smith’s own)

By Laurence Fletcher and Sinead Cruise

LONDON, Jan 28 (Reuters) - British broker Tullett Prebon has offered some senior executives the opportunity to delay receiving bonuses until April to take advantage of a cut in income tax for top earners, a source inside the company told Reuters.

Such an offer would not be unlawful, but could be controversial at a time British politicians and voters are focused on the tax affairs of wealthy individuals and big businesses.

The offer had been made to a small number of executives and top brokers but it had not been circulated widely to staff, the source said. It would mean that bonuses were taxed at a rate of 45 percent rather than 50 percent for any income above 150,000 pounds ($237,000).

Tullett Prebon did not respond to multiple requests for comment via phone, email and text message.

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 did not respond to requests for comment via email and phone on the Reuters story of the possible delay to bonuses.

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.

$1 = 0.6327 pound Editing by Matthew Tostevin

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