The European Union has effectively forced the Financial Services Authority (FSA) to review current regulations regarding banking remuneration and bonuses. While the FSA currently has various regulations in place regarding bonuses and remuneration in the banking industry, a consultation paper has been released for discussion. So what does this mean for the UK banking arena?

The European Union is currently in talks with EU member states to confirm the details of a significant tightening of regulations in the banking arena. The EU is looking to push through regulations which will see only 30% of any bonus paid up front as cash although this figure could fall to 20% for larger bonuses. However, EU states currently believe that's a 40% limit should be introduced with regards to cash bonus payments up front with the remaining bonus to be deferred for at least three years.

There is no doubt that the European Union is looking to introduce far tougher regulations than those currently being discussed by American counterparts, but whether EU member states will allow such restrictions to be placed upon the statute book remains to be seen. There is a feeling that the EU is "throwing out the baby with the bathwater" and the caps currently under discussion are too severe.

»» Return to Homepage

»» Full Tax News Archive

»» Emergency Tax Refunds