Anger as bank bonuses left out

THE release of the Finance Bill was overshadowed yesterday by no mention of changes to bankers’ bonuses, which the Government pledged would be addressed in last month’s budget.

Opposition TDs rounded on the Government and Finance Minister Brian Lenihan after the 223-page document failed to mention bank bonuses.

The minister’s department stated that the proposed 90% tax on bonuses would be addressed at a later stage when the bill is debated — at least two weeks away. Introducing legislation on the contested matter will come close to days before the general election and may end up being a matter for the next government.

The department blamed a large volume of legislative work on the delay in addressing the issue.

AIB is facing up to 100 claims from staff for sums from €3,000 to more than €100,000. If the new tax on the claims is passed in the bill, this means any legal action could be pointless as the new charge would essentially wipe out awards to staff.

But it remains unclear if AIB staff and employees with other financial institutions could then argue that the new tax would not affect them as the claims are from 2008 and any retrospective tax would be unfair.

AIB, who did not contest the bonuses in a test court case, was last month forced into a U-turn after Mr Lenihan told management that the payments would not be met. He further pledged to roll out the 90% tax on bonuses in the budget.

A delay in addressing the bonuses could be down to making sure any government action was well established, explained Erst & Young personal tax partner Jim Ryan. “They’d want to make sure they are on very solid ground. It may be difficult taxing one sector without introducing the charge for all employees across the board.”

Labour’s Joan Burton questioned yesterday the delay in addressing the bonuses: “There’s an awful lot in this [bill] in kicking the can down the road to the next Government.”

The party’s finance spokeswoman also claimed the idea of a 90% tax on bankers’ bonuses was never realistically going to be passed.