RBS 2011 Annual Report Download - page 331

RBS Group 2011 329
3 Operating expenses
2011 2010 2009
£m £m £m
Wages, salaries and other staff costs 7,367 7,945 8,039
Bonus tax 27 99 208
Social security costs 640 661 675
Share-based compensation 197 397 329
Pension costs
- defined benefit schemes (see Note 4) 349 519 638
- curtailment gains (see Note 4) — (78) (2,148)
- defined contribution schemes 98 128 104
Staff costs 8,678 9,671 7,845
Premises and equipment 2,451 2,402 2,594
Other administrative expenses 4,931 3,995 4,449
Property, plant and equipment (see Note 18) 1,267 1,428 1,427
Intangible assets (see Note 17) 608 722 739
Depreciation and amortisation 1,875 2,150 2,166
Write-down of goodwill and other intangible assets 91 10 363
18,026 18,228 17,417
Bank levy
The Finance Act 2011 introduced an annual bank levy in the UK. The
levy is collected through the existing quarterly Corporation Tax collection
mechanism starting with payment dates on or after 19 July 2011.
The levy is based on the total chargeable equity and liabilities as reported
in the balance sheet at the end of a chargeable period. The first
chargeable period for the Group was the year ended 31 December
2011. In determining the chargeable equity and liabilities the following
amounts are excluded: adjusted Tier 1 capital; certain ‘protected
deposits’ (for example those protected under the Financial Services
Compensation Scheme); liabilities that arise from certain insurance
business within banking groups; liabilities in respect of currency notes in
circulation; Financial Services Compensation Scheme liabilities; liabilities
representing segregated client money; and deferred tax liabilities, current
tax liabilities, liabilities in respect of the levy, revaluation of property
liabilities, liabilities representing the revaluation of business premises and
defined benefit retirement liabilities. It is also permitted in specified
circumstances to reduce certain liabilities: by netting them against certain
assets; offsetting assets on the relevant balance sheets that would qualify
as high quality liquid assets (in accordance with the FSA definition); and
repo liabilities secured against sovereign and supranational debt.
The levy will be set at a rate of 0.088 per cent from 2012. Three different
rates applied during 2011, these average to 0.075 per cent. Certain
liabilities are subject to only a half rate, namely any deposits not
otherwise excluded, (except for those from financial institutions and
financial traders) and liabilities with a maturity greater than one year at
the balance sheet date. The levy is not charged on the first £20 billion of
chargeable liabilities. The cost of the levy to the Group for 2011 is £300
million (included in Other administrative expenses). As the Group
continues to target a reduction in wholesale funding, the cost should
decline over time absent further rate increase.