Bank Of America (NYSE: BAC), Citigroup (NYSE: C) To Take Charge For U.K. Bonus Tax

Bank of America (NYSE: BAC) and Citigroup (NYSE: C) reported in regulatory filings that second quarter earnings will likely take a large hit due to a tax imposed on bonus compensation by the United Kingdom. 

The tax, which was implemented in April, calls for a one-time payroll tax of 50 percent on bonuses paid during a four-month span.

The tax applies to bonuses paid to bank employees between December 9, 2009 and April 5 of this year.  Only bonuses in excess of 25,000 pounds ($40,250) will be eligible for the tax. 

Bank of America is not completely clear on how many of its employees the tax will be applicable for, but estimates show the charge will be roughly $465 million, a charge that would be taken in the second quarter results.

Citigroup is expected to take a $400 million charge in the second quarter, based on a regulatory filing.

Estimates for bonus tax payment by the banking industry on a whole are north of 2 billion pounds ($2 billion).