Barclay's tax avoidance
From the archive: Bank pays just 1% in tax
According to an article on The Guardian website dated February 18th 2011, Barclays was forced to admit it paid just £113m in corporation tax in 2009 despite profits of £11.6bn. Barclay's chief executive Bob Diamond, admitted the figure, just 1% of its profits was 'shocking'.
Diamond also confirmed that the bank had 30 subsidiary companies in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands, territories on Ethical Consumer's list of tax havens at the time of writing. The bank had previously quoted a figure of £2bn, but it later became clear that this had included, and mainly consisted of, payroll tax - i.e. tax paid by the bank on behalf of its staff.
According to former City minister Lord Myners, “the combination of tax avoidance strategies with subsidiary companies together with losses brought forward means that banks will be not be making a meaningful contribution to corporate tax for some years.”
Barclays said it complied with tax laws in the UK and all the countries where it operated and that in 2010 it paid over £2.8bn in taxes in the UK and £6.1bn globally. The £2.8bn UK bill again included payroll taxes. The bank said: “The corporate tax affairs of an organisation with the global footprint of Barclays are complex and not reducible to simplistic comparisons. Any link between Barclays Group profits and the amount of tax paid to the UK government is inappropriate - there is no direct correlation between the two.”
The Bank had come to the attention of campaign group UK Uncut which was putting pressure on companies linked to tax evasion in light of government cuts to public services. In one incident campaigners had occupied a London branch of the bank and turned it into a library.
Read more about the lack of ethics in the banking sector in our banking special report.
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