LONDON: Credit Suisse has launched a legal battle to reclaim hundreds of millions in compensation from the UK bank bonus tax.
The tax, which was passed into law by the Labour government in 2010, introduced a one-off 50% levy on banker bonuses.
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The tax was implemented in the wake of the global financial crisis following a series of banking scandals. The 50% levy was paid by banks, with individuals then paying income tax on the bonus they received.
The tax netted the government £3.4 billion, around five times the amount it had anticipated.
Credit Suisse did not require a government bailout during the financial crisis and therefore questioned whether the tax should be viewed as ‘state-aided’ measure.
The Swiss bank cut its bonus pool by 5% to help fund the tax, while its 400 UK-based managing directors saw their rewards slashed by an additional 30%.
