UK Proposes to Tax Banker Bonuses, Raise Tax

Mayank Mehta
09 Dec, 2009
New York City

UK plans to tax banker bonuses with 50% levy and will also increase national insurance contributions to pay for the bank bailout and economic stimulus. BHP Billiton sells Ravensthorpe for $340 million.

[R]4:00 PM London, 11:00 AM New York – UK plans to tax banker bonuses with 50% levy and will also increase national insurance contributions to pay for the bank bailout and economic stimulus. BHP Billiton sells Ravensthorpe for $340 million.[/R]

UK stocks traded volatile after rating agencies harden their views on Spain and Greece and make cautionary comments about the UK fiscal deficit. S&P put Spain debt on negative watch and Fitch cut its rating on Greek sovereign debt.

In London FTSE 100 Index closed lower 19.24 or 0.3% to 5,203.89 and the pound edged lower to close at $1.624 and at €1.103.

Chancellor of the Exchequer Allistair Darling proposed to tax bonuses at banks that are more than £25,000. The marginal tax rate of 50% is likely to affect banker bonuses. Darling also plans to raise value-added-taxes to 17.5% from 15%.

He also said in the Parliament that economy is likely to shrink 4.75% compared to the previous estimate of 3.75%. The four year budget deficit to 2013 is also expected to grow to £611 billion compared to previous estimate of £606 billion.

Gainers & Losers

BG Group plc fell 1.2% to 1,070.00 pence and the company and its partner Petrobras have finalized the test well.

BHP Billiton plc fell 0.4% to 1,848.50 pence after the mining giant said it has signed an agreement to sell the Ravensthorpe Nickel Operation to First Quantum Minerals Australia Pty Ltd for $340 million.

Carillion plc added 0.03% to 293.40 pence after the support services and construction firm said Al Futtaim Carillion has been awarded a £150 million contract to build a new headquarters for the Abu Dhabi Investment Council.

Cobham plc dropped 0.1% to 243.90 pence after the defense and aerospace group has signed an agreement with Chevron Australia to provide fixed wing aviation services to support Chevron’s operations in the north-west.

DTZ Holdings plc rose 1.3% to 74.00 pence after the property broker said first-half revenues fell 8.7% to £168.2 million from £184.3 million a year ago. Net loss for the first-half was £24.3 million or 9.31 pence per diluted share compared to net loss of £15.7 million or 27.83 pence per share a year ago.

easyJet plc decreased 3.2% to 364.70 pence after the provider of a low-cost airline service confirmed today that Michael Rake will become chairman of the company and David Michels resume the role of senior independent director.

IG Group Holdings plc rose 4.0% to 353.80 pence after the spread bet firm expects to report revenue of around £143 million and adjusted profit before tax of around £77 million. Revenue growth was 13% both including and excluding FX Online Japan KK, which the Group acquired during October 2008.

Imagination Technologies Group plc added 2.9% to 224.00 pence after the chip designer said first-half revenues rose 40% to £38.2 million from £27.2 million a year ago. Net profit for the first-half was £6.0 million or 2.4 pence per diluted share compared to net loss of £102,000 a year ago.

Impax Environmental Markets Plc advanced 0.7% to 112.30 pence an environmental investment manager said full-year revenues fell 9% to £10.4 million from £11.4 million a year ago. Net profit for the full-year fell 4% to £2.3 million or 1.97 pence per diluted share compared to net profit of £2.5 million or 2.12 pence per share a year ago.

Micro Focus International plc gained 0.3% to 434.00 pence after the software and information technology firm said first-half revenues rose 46% to $198.4 million from $135.6 million a year ago. Net profit for the first-half fell 3.3% to $29.3 million or 13.74 cents per diluted share compared to net profit of $30.3 million or 15.36 cents per share a year ago.

Photo-Me International plc plunged 12.2% to 39.50 pence after the photo booth maker said first-half revenues rose 9% to £117.7 million from £108.1 million a year ago. Net profit for the first-half rose 371% to £8.0 million or 2.21 pence per diluted share compared to net profit of £1.7 million or 0.47 pence per share a year ago.

PZ Cussons plc rose 0.04% to 274.00 pence after the soap maker full-year outlook said Strong performance in Europe and Asia is expected to offset any continued impact in Nigeria of adverse exchange rates and the tightening of liquidity in the market.

Stagecoach Group plc increased 5.0% to 157.40 pence an international public transportation company said first-half revenues rose 3% to £1.08 billion from £1.05 billion a year ago. Net profit for the first-half fell 12.7% to £60.6 million or 8.4 pence per diluted share compared to net profit of £69.4 million or 9.6 pence per share a year ago.

Standard Chartered PLC the Asia-focused bank climbed 3.3% to 1,485.50 pence.