Tuesday, Mar 17, 2009
Barclays, the Caymans, Luxembourg...
Guardian: Barclays gags Guardian over tax
A Barclays whistleblower writes: "It is a commonly held view that no agency in the US or the UK has the resources or the commitment to challenge SCM. SCM has huge amounts of resources, the best minds rewarded by millions of pounds. Compare this with HMRC [Her Majesty's Revenue & Customs] recently advertising for a tax and accounting expert with the pay at £45,000."
Shows how the banks can use their muscle against the public interest. Also an interesting comparison with public sector resources.
Posted by letthemfall @ 12:44 PM (1036 views) Add Comment
11 Comments
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1. 51ck-6-51x said...
"The avoidance of taxes is the only intellectual pursuit that still carries any reward." - John Maynard Keynes
2. little professor said...
It's up on Wikileaks already. They can't censor stuff in this day and age.
Basically they created shell companies in Luxembourg and the Cayman Islands and shuttled billions of pounds between them to claim double tax relief. It was tax avoidance rather than tax evasion, and it was all perfectly legal, but considering the bonuses paid and the huge government bailouts they have received, they should be ashamed of themselves.
3. 51ck-6-51x said...
Good find LP!
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. flashman said...
Barclays have not committed any crime here. If the Govt or the public doesn’t like the law then change it. It is not realistic to expect a private company to pay more tax they have to. If they did then their shareholders would row them out. Why was the legislation so weak in the first place? Probably written by a team of second rate, bone idle civil servants.
I have yet to meet a tradesman who doesn't take cash payments whenever possible. This is what real tax fraud looks like. It is also a proven fact that more than 50% of the population steals from their workplace. This is genuine theft. Several studies have also shown that more than 70% of the population lies to the taxman wherever possible. In the light of these sad truths isn't it a bit unfair to criticise companies for legally minimising their tax bill?
6. The Baldman said...
Normally I would tend to agree with you flashman but are these not the same banks who seek bailouts from taxes they have never paid- go ask the caymans for the money?
7. iguana said...
As I have said many times on this site, tax avoidance is rampant within the financial sector. It reaches such proportions that the reasonable expectation of tax revenues by HMG turns instead into a black hole.
I am not refering to legitimate claims for tax relief available to all, which any worthwhile accountant would identify for his client, but to elaborate 'constructs' based upon advice from leading counsel, where by gross misrepresentation of reality (lying) an alternative, artificial reality is created, and in this new reality a bank is not a bank but is perhaps a supplier of staff or of management services or maybe a landlord for itself or it is merely a device for reporting financial results to a overseas arm of itself. All of these examples (and there are many more) are real and have resulted in huge windfalls for the institutions, and huge losses for the population at large.
All of the financial sector has been 'up to it' for years and in the process tying up the resources of HMRC, not only with the original blatant lying but then with years of ill founded (but well funded) appeals through the Courts when the lies are found out. This is where the real tax avoidance/fraud can be found - organised crime lords can only sit back in wonder at the scale.
8. flashman said...
This is bollo*ks Iguana. The financial services sector contributes about 13.9% of the total UK tax take. As the financial sector represents only about 10% of the total GDP, then it is fair to say that the rest of the economy must be thieving big time.
9. drewster said...
iguana / flashman,
Isn't it surprising how countries like Luxembourg, Switzerland, the Cayman Islands, Jersey, Guernsey, or the Isle of Man can all survive and have decent economies without taxing banks heavily? Perhaps we should cut tax on banks and raise it in other ways (e.g. on the bankers' salaries, or better still a land value tax on the bankers' houses), or just cut tax entirely, rather than blaming other countries for having lower tax rates than our own?
If the tax system wasn't so complicated in the first place, there'd be less need for all these shell games.
10. inflation is eating my savings said...
A unified world banking system might stop this sh1t.
11. letthemfall said...
drewster
The places you mention thrive because they are tax havens. They attract "companies" because the "tax" they impose is little more than a fee for sheltering earnings from the countries where these earnings are made. Their economies are predicated on low taxes, so the fact they are low is no surprise at all.
Banks are in a unique position because of their large cash flows and taking advantage of legal loopholes like this is reprehensible. Perhaps we need more and smaller banks to help circumvent this kind of behaviour, and of course end the too-big-to-fail syndrome.