The controversial assault on bankers' commission checks was expected to raise more than $800 million with a one-time tax that takes effect immediately, The Times of London Online reported Wednesday.
The plan calls for a 50 percent tax on bonuses topping $40,000 and includes an immediate rule change that treats salary raises as bonuses for one year to prevent banks from hiding commission pay in salaries.
With rumors of the tax coming ahead of the presentation, bankers had already begun shifting bonuses into salaries, creating hedge funds out of their individual earnings and moving money overseas, The Times said.
The budget proposal was marked by spending cuts and new taxes. People with incomes topping $32,500 a year would also be hit with a "stealth" tax starting in 2011, the Times said.
"This government preaches about fairness but these measures will hammer the low paid by cutting their pay while leaving most of the tax avoidance loopholes for the wealthy," said Vince Cable, the Liberal Democrat Treasury spokesman.