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Goldman Sachs Got Walloped by British Bank Tax

Britain's one-time bank tax hit Goldman Sachs harder than its Wall Street rivals, a review of recent filings with the Securities and Exchange Commission reveals.

The Goldman Sachs booth on the floor of the New York Stock Exchange
Getty Images
The Goldman Sachs booth on the floor of the New York Stock Exchange

Goldman revealed that it has set aside $600 million to pay the 50% tax on banker bonuses the UK put in place in December.

By contrast, Morgan Stanley said it expects to pay only $361 million.

Citigroup set aside $400 million, and Bank of America set aside $425 million.

The levy on JP Morgan Chase came closest to that on Goldman. JP Morgan Chase said its share of the tax would be $550 million.

All told, the four banks will pay around $2.3 billion under the banker bonus tax.

Since investors were well aware that the levy would hit the banks, it is unlikely that their share prices will suffer from the disclosures. Goldman, for instance, recently paid a $550 million fine to the SEC and saw its share price subsequently rise.

The one time tax was originally expected to raise roughly $860 million (£550 million). In fact, it has pulled in far more than expected. U.K. officials now project it will take in roughly $3.9 billion (£2.5 billion).

Earlier this summer, the UK announced a new, permanent bank taxwould be put in place in 2011. The new tax, which will hit Britain’s largest banks and foreign banks with U.K. operations, is expected to raise £2 billion ($3.1 billion) annually.

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