Banks slam Budget windfall tax on bonuses

British banking chiefs have reacted angrily to news the Treasury is drawing up plans for a one-year windfall tax on bonuses paid to some UK-based bankers, reports the BBC.

According to reports over the weekend, a scheme could be unveiled in Alistair Darling's Pre-Budget Report on Wednesday.

However, Angela Knight from the British Bankers' Association (BBA) called such taxes "populist, political and penal".

She said windfall taxes on bonuses would send the wrong message to the rest of the world about the UK's position as a banking centre.

"We have already seen quite a few companies shift out of the UK," BBA chief executive Angela Knight told the BBC.

"It might be popular to put very high taxes on a few [bankers], but we need to know how we would look internationally."

Options in the Pre-Budget Report on Wednesday may include a super-tax on big bonus earners or a larger employers' National Insurance charge on banks.

Writing in his blog, BBC business editor Robert Peston said taxing bankers rather than banks would not weaken the banks and could raise several hundred million pounds.