Tim Lyford, head of Corporate Tax at Smith & Williamson, the accountancy and financial services group, warns that other parts of the financial sector are at risk.
The new levy on discretionary bonuses is affecting a wider range of organisations and individuals than the banks the headlines say it is aimed at. For example, the securities and broking industries and IFAs could also be hit as activities caught are wider than deposit taking, and the bonus systems in these sectors are often discretionary.
Tim Lyford, head of Corporate Tax at Smith & Williamson said: "It is the banks who are going to pay this new levy – not the bankers. The bankers will receive their bonuses and pay income tax on what they take home."
However, what was clearly an attack on the banking industry is actually hurting a wider scope of businesses than initially thought.
"Other businesses that offer discretionary bonuses that have managed to weather the recession are being punished. Many businesses are wondering if and how they will be affected and should seek advice. I have some very concerned clients and my team and I are working to find more tax efficient means for them to reward their employees," Tim continued.
Businesses in the financial sector that pay high commission based bonuses need to review their schemes urgently to make sure they do not fall foul of the new regime.