Directors Waiving Bonuses Can Still be Taxed on Them

turning down bonus
As the battle against spiralling directors’ bonuses continues unabated in the UK, I came across this interesting and topical snippet from accountants BKL on the perils of renouncing directors’ bonuses.

BKL asks: “What’s worse than being bullied by the tabloid press into waiving a bonus?” Answer: “Being bullied into waiving a bonus and still having to pay tax on it!”

Applying  the logic to a government-owned business, there could be a good case for awarding the directors their bonuses, exerting pressure on them to renounce and reaping a windfall contribution to tax revenues. Perhaps I am reading too much into this!

On a more serious note, were a director unlucky enough to find himself faced with a tax bill in this situation it is unlikely that he would be able to recover by way of indemnity either from the company or from D&O insurers.

 

About Francis Kean

Francis is an Executive Director in Willis’ FINEX Global, where he specializes in insurance for Directors & O…
Categories: Directors & Officers | Tags: ,

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