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Goldman Sachs Bonus Tax Avoidance Tactic Is 'Depressing' Says BOE Governor Mervyn King

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UPDATE: Goldman Sachs has decided not to hold back investment bankers' bonuses until the new financial year to benefit from the cut in the top rate of income tax from 50p to 45p, which comes into effect on April 6.

The Governor of the Bank of England has slammed bosses at Goldman Sachs for considering delaying bonus payments so its millionaire bankers can pay less tax.

The bank is one of a number of City institutions contemplating deferring bonuses until after April 6th when the top rate of income tax drops from 50p to 45p.

Mervyn King said he found the proposed tactic "depressing" given the country's current economic situation.

goldman sachs tax

In 2011 Goldman Sachs paid out nearly £8billion in bonuses

He said: "I find it a bit depressing that people who earn so much find it would be even more exciting to adjust their payouts to benefit from the tax rate, knowing that this must have an impact of the rest of society.

"I think it would be a rather clumsy and lacking in care and attention to how other people might react. And in the long run, financial institutions do depend on goodwill from society."

The move could cost the Treasury of millions of pounds.

King said that it would not be "unlawful" for banks to defer bonus payments in this way.

The chairman of the Commons Public Accounts Committee, Margaret Hodge, also condemned the reported move by Goldman Sachs.

"What we are seeing now is the immoral situation whereby people who earn a lot of money just believe it's cool not to pay tax," she told The Times.

"It fails to understand the importance of everyone contributing to the common good and Goldman Sachs just don't get it. They feel no responsibility for paying their fair share of tax."

His sentiments echoed those made in Westminster on Monday as Labour increased pressure on Chancellor George Osborne to prevent the "opportunistic money grab".

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chris leslie tax

Chris Leslie accused the government of being "out of touch"

Chris Leslie, shadow Treasury minister, said: “It cannot be right that this out-of-touch government is making millions of working people and pensioners on modest incomes pay more while giving millionaires and bankers a huge tax cut.

'Banks need to think carefully about their own reputations if they seek to avoid tax in this way, but the ultimate responsibility lies with David Cameron and George Osborne."

 
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