Bankers’ bonuses are taxed fairly, so why aren’t those

So-called incentive fees are treated as capital gains, but they’re bonuses in disguise and Labour plans to close that loophole

There’s the Tory tax-cutting rhetoric and then there’s the tax-rising reality: between 2019 and 2024 the Conservatives delivered the largest rise in tax as a share of GDP of any postwar parliament (3.3%, equivalent to more than £3,000 per household).

Higher taxes should mean more pressure for fair taxes – to maintain public consent for paying in. Which brings me to the hi-tech-sounding world of “carried interest”. This is the label given to incentive fees paid to private equity fund managers. But too often they aren’t taxed like it: these fees are treated like capital gains (returns on risky investments) rather than what they are, bonuses.