Bank account providers face 'windfall taxes'
07 December 2009 09:46:40
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| Plans for extra levies could impact on bank customers. |
Chancellor of the exchequer Alistair Darling is said to be considering a temporary "windfall tax" on bankers' bonuses.
However, a source has told news agency Reuters that there are "big difficulties" associated with imposing the extra taxation.
The plans could include an increase in National Insurance payments from financial institutions who award big bonus packages to high-performing staff or a direct super-tax on the bankers themselves.
Mr Darling's Pre-Budget Report, to be delivered on Wednesday (December 9th), is a likely venue for the public unveiling of these proposals.
The taxes could raise £1bn a year, helping to repair some of the damage done to government finances by the credit crunch and recession.
However, the financial squeeze caused by the extra costs could impact on the services offered to banks' retail customers.
"There are really big difficulties doing anything like this," the source, who is "familiar" with the matter, told Reuters.
"You wouldn't want to do anything that eroded banks' capital."
Speaking to the BBC, a minister suggested that the taxes would be justified due to the fact that the government's own emergency bailouts have helped boost profits and bonuses for banks.
"The fact is that we have gifted vast profits to the banks as a result of our actions," he commented.
"What we can't accept, and what society can't accept, is that they are using those profits to pay enormous bonuses."
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