Tax Needed on High Salary in UK
February 7, 2012 Taxation in UK
The Trade Unions Congress of the UK is proposing new tax changes which would bar companies from deducting high salaries and bonuses as expenses for tax purposes.
The UK government needs to “…end the privileged status that the financial services sector enjoys at the expense of everyone else by announcing [a] tax on excessive pay and bonuses”, such a conclusion was drawn by the Trade Union Congress (TUC) in a new report published recently.
According to the TUC, there are 81 000 taxpayers in the UK who have personal incomes exceeding 10 times more than the national earning average, and are paid a cumulative amount of GPB 6.8 billion per year. The report found that a majority of these taxpayers earned their incomes from salaries and bonus payments, but not from an investment or from capital earnings.
The TUC proposed that the government should change the current tax rules so that all payments of salaries and bonus exceeding an annual amount of GBP 262 000 a person should no longer be treated as non taxable expenses for the purpose of calculating corporate taxation. If implemented, the new measure would enable the UK government to raise an extra GBP 5 billion in tax revenues per year. The TUC claims that the change would also encourage large corporations to increase salaries to lower level staff.
Photo by tuc.org.uk