Financial giant Rothschild is considering whether to hand out 2014 bonuses to staff early in order to avoid potential taxes that could be brought in if Labour wins the election.
Shadow chancellor Ed Balls has promised to introduce a £1.5bn to £2bn tax on bonuses during its first year in office to fund a “jobs guarantee” for young people struggling to find work.
Although Rothschild usually pays bonuses to its 1,000 London staff in June, the investment bank may pay them before the general election on 7 May. The story was first reported in the Financial Times.
The investment bank has been carrying out a huge overhaul of its corporate structure over the last three years to unify the Rothschild family of companies in the UK and overseas.
There have been internal conversations regarding the benefits of aligning the varying financial year-end dates of the international companies, prompting suggestions that these discussions could also lead to a review of the timing of its bonuses.
“Rothschild annually distributes a percentage of its profits for the year to its staff as a profit share,” a spokesperson for the bank said. “The payment date of this distribution varies across divisions and geographies.”
The spokesperson declined to comment on the timing of 2014 bonus payments, although a decision is expected to be taken on 31 March, when the bank’s financial year comes to an end.
Most investment banks in the UK have either paid out bonuses already or are scheduled to do so in advance of the election.
The banking sector has been hit by a series of reforms on pay, following the financial crisis – including new EU rules capping bankers’ bonuses at the same size as a banker’s salary, or double the salary if shareholders agree.