Bank of America Corp (NYSE: BAC) and Citigroup, Inc (NYSE: C) will pay a combined $865 million to cover a new U.K. tax on employee bonuses as the British government seeks to mitigate public outcry over its bank bailout.
Bank of America which will pay $465 million in the tax said that the charge should appear in the second quarter in a federal filing.
Both companies said that its numbers are estimates. Citigroup, Inc (NYSE: C) said that its number has not taken into effect corporate charges and Bank of America said that it is still awaiting additional guidance from government officials.
The United Kingdom’s government imposed a one-time tax on bonuses greater than 25,000 pounds or about $37,000 USD. The tax covers bonuses made between December 9th, 2009 and April 5th, 2010.
The British Treasury, which had initially said the tax would raise 550 million GBP, has now estimated it may gain as much as 2 billion pounds, according to a report from Bloomberg Business Week.
