The UK boss of Handelsbanken – the Swedish bank lauded by the government as a challenger to Britain's big five – on Wednesday expressed his frustration that the Swedish-based bank's employee ownership scheme has fallen foul of the taxman.
Anders Bouvin, chief executive of the UK arm of the bank, which does not pay bonuses, said the past decision by HM Revenue & Customs that has effectively blocked payments to the UK bank's share scheme for staff could have "business consequences".
The scheme, known as the Oktogonen foundation, which Bouvin called the "glue" of the bank, allocates shares to staff that they receive at the age of 60. Since 2010, UK employees have not received their allocations as the tax authorities changed the rules so that they needed to pay tax when the share awards are made, not on receipt at age 60.
"That is a big source of frustration to us," said Bouvin.
The UK is the fastest-growing part of Handelsbanken's operations, with 161 branches, up from 133 since the beginning of last year, during which time it increased its lending by 20%.
The overall bank reported operating profits of Skr18bn (£1.7bn), some Skr1.1bn of which came from the UK.
The bank gives its branch managers responsibility for lending decisions and does not have centralised call centres. But it also does not have formal rates for loans or savings, and deposits are not covered by the Financial Services Compensation Scheme, although they are covered up to €100,000 by the Swedish equivalent.
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