Alistair Darling admits that banking super tax has failed

Former Chancellor of the Exchequer Alastair Darling has this week delivered a speech suggesting that his "banking super tax" which was supposed to hit those receiving bonuses in excess of £25,000 a year has effectively failed. He believes that due to the very loose wording of the regulations it was particularly easy for many of the high profile financial companies to potentially delay any payments to "reduce" employee tax liabilities.

However, Alastair Darling also believes that the real reason for the introduction of the super tax was to send a message to the UK financial industry that the sector would need to pay its fair share to repair the UK PLC balance sheet and repay UK taxpayers who invested massive amounts of money to save the UK banking industry. Interestingly he also believes that we will not see a repeat of the banking super tax in the future despite growing calls for the introduction of a harsher tax regime for those in the upper echelons of the UK financial industry.

Historically super taxes and similar one-off arrangements tend to be fairly easy to avoid by simply delaying the payment of bonuses until such times as the increased tax levels are not applicable.