Credit Suisse Sues to Recoup Part of $4.8 Billion Bank Bonus Tax
(Bloomberg) -- Credit Suisse Group AG is seeking to reclaim hundreds of millions in taxes from a controversial U.K. bonus levy that hit banker compensation in 2010.
The Swiss lender is preparing for a London trial against the British tax authority over the one-off 50 percent tax on banker bonuses of more than 25,000 pounds, lawyers for the bank said at a court hearing Monday. Credit Suisse paid 440 million Swiss francs ($450 million) for the tax.
The tax implemented by the Labour government in the wake of popular anger over lavish banker bonuses following the global financial crisis generated 3.4 billion pounds ($4.8 billion), almost five times higher than initial estimates. Credit Suisse, which didn’t take a government bailout, is asking whether the tax should be considered a state-aid measure.
Credit Suisse cut its global bonus pool by 5 percent to help fund the cost of the tax, while its 400 U.K.-based managing directors saw their pot slashed by a further 30 percent. The firm is now seeking both repayment and damages, citing the "arbitrary impact" of the levy.
Credit Suisse has a legitimate interest in pursuing formal proceedings "to provide certainty as to the proper scope and application of the 2010 one-off tax,” the bank said in an emailed statement. Credit Suisse "has sought to resolve Bank Payroll Tax-related issues over a number of years."
The bank’s lawsuit is "too late and in the wrong place," George Peretz, a lawyer for the tax authority, HM Revenue and Customs, said at the hearing. A representative for HMRC declined to comment.
A trial is scheduled for the summer of 2019.
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