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Sainsbury's looks to reduce bonus tax payments

In a move which many companies in the UK are likely to replicate it has been revealed that J Sainsbury, the prominent UK supermarket group, will bring forward bonus payments for around 1,200 of the company's highest earning members of staff. These will include the company's chief executive Justin King with the main reason being the forthcoming introduction of the 50% super-tax on bonus payments by the UK government. It is unclear exactly how much money this will save employees of J Sainsbury but with some of the top earners receiving millions of pounds a year it will likely be a significant amount.

While J Sainsbury has confirmed the move to pay bonuses up to 12 weeks early it has also revealed that the only portion of bonus payments to be paid early will relate to group targets rather than personal employee targets. It is therefore likely that any staff in line for personal target bonus payments could be susceptible to the 50% super-tax rate later this year.

Even though this move is not likely to go down well with the UK government the very fact that the authorities gave significant notice of the 50% super-tax band has backfired somewhat. In reality there is nothing which the authorities can do if companies such as J Sainsbury decide to pay their bonuses early to avoid additional tax charges, which have been designed to hit the top earners in the UK.

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