UK announces one-off tax on bankers' bonuses

[December 09, 2009]  LONDON (AP) -- British Treasury chief Alistair Darling has announced a one-off tax on bankers' bonuses.

The 50-percent tax unveiled in the government's pre-budget report on Tuesday will be levied on 2009 bonuses of more than 25,000 pounds ($40,800).

The charge will be imposed on the pool of bonuses, rather than individual payments. It will be paid by banks -- not the employee.

The government has sharply criticized bonuses paid to bankers -- especially those paid by companies saved from collapse by taxpayers' money -- and the measure is likely to prove popular with the general public.

The Labour government's pre-budget report is seen as key to setting the tone for a debate about how best to fuel Britain's slow recovery from recession ahead of next year's general election.

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AP's earlier story is below.

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LONDON (AP) -- British Treasury chief Alistair Darling has downgraded his forecast for the economy this year, saying it will shrink by 4.75 percent.

That is significantly worse that the 3.5 percent contraction Darling predicted in April.

But he has kept his forecast of 1-1.5 percent growth for next year.

Darling has also raised his 2009-2010 borrowing forecast slightly to 178 billion pounds, from 175 billion pounds previously.

Britain is the only major economy still in recession, with the United States, Germany and Japan all already recording growth.

The Labour government's pre-budget report is seen as key to setting the tone for a debate about how best to fuel Britain's slow recovery ahead of next year's general election.

[Associated Press]

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