Bank Payroll Tax
HMRC have announced further changes to the scope of the bank payroll tax which will be payable by banks on any bonuses to employees that exceed £25,000. This latest announcement is to make clear that stockbrokers and other non-banking businesses will not be subject to the bank payroll tax.
The changes specifically clarify the following:
The capital resources requirement to be defined as a UK-resident bank or a relevant foreign bank.
Firms that carry out activities relating solely to spread betting or to commodities outside banking groups will be excluded from the scope of the tax.
A group will not be treated as a banking group for the purpose of the bank payroll tax where 90% or more of the groups trading income relates to excluded activities.
The bank payroll tax will be payable by all Banks, financial businesses and holding companies in banking groups, building societies, financial businesses and holding companies in building society groups and UK branches of foreign banks that pay bonuses either directly or through intermediaries.
The Bank Payroll Tax will be payable on 31 August 2010.