The chancellor has held off the pronouncement of a windfall tax for the banks, as expected, but chose instead to punish large institutions that dish out sizeable lump-sum bonuses to high-performers. In his pre-Budget report, Alistair Darling announced a special one-off 50% levy on any individual discretionary bonus above £25,000. 'There are some banks who still believe their priority is to pay substantial bonuses to their already high-paid staff. Their priority should be to rebuild their financial strength and increase their lending. But if they insist on paying substantial rewards, I am determined to claw money back for the taxpayer,' said Darling. The levy applies to any discretionary bonus, in whatever form, meted out to individuals in the period between the date of the pre-Budget report and 5 April 2010. This is to be paid by the bank and not its employees. Anti-avoidance measures will be introduced with immediate effect. High-earning bank staff will be expected to pay income tax at their top rate on any bonus they receive. Ian Fleming, managing director of Alvarez & Marsal Taxand warned that the 'supertax' would add to the exodus from the UK of mobile executives, already encouraged by the 50% tax rate, and drive away people and capital essential for growth. 'It is interesting to note that France and Germany, once very noisy about this issue, have not followed suit.'The taxes raised would be a drop in the ocean. Like it or not, the long term success of the UK's financial services industry is key to the recovery of the economy. Measures such as these and the recent attack on non-doms puts this at risk and undermines the global view of the UK's financial stability and attractiveness for business,' said Fleming. He said there would also be practical with implementing the levy. 'How would you define "bonuses" and "bankers" and how complex will the legal drafting need to be to counter smart tax planning? The chancellor referred to "anti-avoidance" measures that may try to address this issue, but we are not convinced,' said Fleming.