Bonuses: Goldman Bankers To Pay Top Tax Rate
Goldman Sachs has become the first of the major banks operating in the UK to confirm it will not delay bonus payments so staff avoid paying the 50p tax rate.
The 50p top rate of income tax is replaced by a new higher rate of 45p on April 6 under reforms outlined by Chancellor George Osborne.
Goldman's decision was announced amid growing pressure on the wider banking industry to ensure bonus awards for 2012 were paid at the highest rate and that the awards were lower than those seen the previous year.
The development emerged just hours after Bank of England Governor Sir Mervyn King delivered a broadside at anyone planning to defer their bonus until after April 6, which he said would be "depressing" and "lacking in care and attention" to the rest of society.
He warned banks that they risk losing public goodwill if they deferred payments to exploit the cut in the top rate.
Over the past few days, it became known that Goldman Sachs was considering holding back bonuses until after April 6, a move which could potentially have cost the Treasury millions of pounds.
The company, which publishes its full-year results on Wednesday and is expected to inform staff of 2012 bonus levels shortly afterwards, has declined to comment publicly on the issue.
But, according to people familiar with the process, the bank's compensation committee decided at a meeting on Tuesday not to go ahead with the deferral.
Sir Mervyn made no secret of his distaste for the idea, telling MPs: "I find it a bit depressing that people who earn so much seem to think that it is even more exciting to adjust the timing of it to get the benefit of a lower tax rate - which they will benefit from in the long run to a very great extent - knowing that this must have an impact on the rest of society, when even now it is the rest of society which is suffering most from the consequences of the financial crisis.
"I think it would be rather clumsy and lacking in care and attention to how other people might react."
Meanwhile, media reports suggested rival bank Morgan Stanley intended to defer 100% of its top-earning employees' bonuses.