Early bonus payouts means more movement
Scottish firms' enthusiasm for paying bonuses early in a bid to avoid the new 50% tax rate for high earners may not have had the desired effect - recruiters are reporting higher numbers of candidates looking to switch jobs.
According to a report from accountancy firm Baker Tilley, there's been a "huge upswing" in Scottish companies looking to accelerate bonus payments to avoid the income tax rate hike due at the end of this month.
"There's been a substantial move to accelerate remuneration bonus payments," says David Gwilliam, regional managing partner for Scotland at northern England at Baker Tilley. "For those organisations where the new 50% tax rate is relevant to employees you are talking about a very large percentage paying early, certainly more than half."
Unfortunately, though, this move comes at a time when candidates are tentatively returning to the job market, and there's likely to be more movement in the wake of these bonus payouts.
One asset management-focused headhunter, who declined to be named, told us: "We're seeing more job opportunities, and increased confidence from candidates, and would therefore expect the usual post-bonus moves to return this year."
Another recruiter tells us to "expect some significant shifts" in the Scottish fund management sector over the coming weeks.
The move towards paying bonuses before the higher rate of tax comes into play may seem a little underhand, but Scottish firms are unlikely to be alone in doing so. As tax experts told us in https://news.efinancialcareers.co.uk/News_ITEM/newsItemId-22095 November last year, this practice could be increasingly common.
