Goldman Sachs bonus u-turn

Investment bank Goldman Sachs has said it will not to defer bonuses until the next tax year following criticisms from Bank of England governor Sir Mervyn King.

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Labour: Government must drop millionaire tax cut plans

Labour said the bank made the right decision. Credit: Reuters

Labour said Goldman Sachs made the "right decision" to pay bonus payments to staff this year, before the 50p tax rate is abolished, but called on the Government to drop plans to give a £3 billion tax cut to millionaires. Shadow Treasury Minister Chris Leslie said:

"Goldman Sachs has made the right decision, but the fact remains that from April thousands of bankers and millionaires will get a huge tax cut from David Cameron and George Osborne."

"The Government should drop their plan to give a £3 billion tax cut to the richest people in the country while slashing tax credits for millions of working people on modest incomes. And they should repeat Labour's bank bonus tax to fund a guaranteed job for young people out of work."

"Thanks to George Osborne's tax cut for millionaires, next year's bonus round looks set to be very lucrative for thousands of bankers."

Goldman Sachs U-turn on bonus tax plans

Investment bank Goldman Sachs have decided not to defer bonuses until the next tax year, meaning those receiving bumper payouts will have to pay the 50p tax rate.

The bank had been planning to delay paying their staff bonus payouts until after April this year: which would have allowed them to benefit from the government's tax cut for those earning over £150,000, due to come in April.

Bank of England Governor Sir Mervyn King criticised the plans earlier today, saying they were "depressing" whilst speaking to the Treasury select committee.

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Mervyn King slams greedy bankers over bonus tax plans

Sir Mervyn King said the move was "depressing" and "clumsy". Credit: David Jones/PA Wire

Bank of England governor Sir Mervyn King has hit out at greedy bankers amid reports that Goldman Sachs was set to delay staff bonus payments until after the 50p tax rate is reduced.

Income tax on people earning an annual salary of more than £150,000 is set to drop to 45p in April, allowing banks the opportunity to pay less tax by delaying payments.

Sir Mervyn criticised the practice while speaking to the Treasury select committee this morning, saying: "I find it a bit depressing that people who earn so much find it's even more exciting to adjust the timing of (their bonus payouts) to get the benefit of the lower tax rate."

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