Credit Suisse was accused yesterday of "sophisticated and aggressive tax avoidance" after the investment bank and wealth management group briefed staff that an unexpected one-off bonus would be awarded to hundreds of its London-based bankers tomorrow – less than five months after the government's 50% levy on bank bonuses expired.
The bank had initially won praise in some quarters for curbing 2009 bonuses in response to the tax on bankers' rewards announced by the then chancellor, Alistair Darling, last December. In effect, it appeared that Credit Suisse bankers were to shoulder this temporary tax burden, whereas several other investment banks chose to pass on the tax charge to shareholders. Yesterday, however, Credit Suisse staff were briefed that the bank's 400 UK managing directors would this morning be receiving one-off "discretionary leadership awards". The total cost of these awards was not disclosed but they will take the form of payments in cash to be released to bankers in 2012 and 2013. The payments will be subject to "clawback" if related performance falters.
Critics of the City's bonus culture were quick to see the move as a cynical attempt by Credit Suisse to avoid contributing its fair share to the Treasury's already perilously light coffers. The Liberal Democrat Treasury spokesman, Lord Oakeshott, said: "This could be sophisticated and aggressive tax avoidance. If so, Credit Suisse managing directors are laughing all the way to the bank with an exceptional bonus and the British taxpayer is out of pocket."
Credit Suisse would not comment on accusations of tax avoidance or an out-of-control bonus culture. In a statement it said: "We are committed to remaining competitive in the UK. We are recognising the commitment of our UK leadership team with a discretionary leadership award. The award is long-term in nature, deferred over three years, tied to … performance of the bank and is subject to clawback provisions."
