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Barclays Bank Paid Just £113M In Tax (£11.6Bn Of Profits)

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Guardian link

Barclays Bank has been forced to admit it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn of profits.

The admission stunned politicians and tax campaigners. It was revealed on the eve of a day of protests planned against the high street banks by activists from UK Uncut, a group set up five months ago to oppose government cuts and corporate tax avoidance.

The Labour MP Chuka Umunna, who lobbied Barclays' chief executive, Bob Diamond, to reveal the tax paid by the bank, described the figure – just 1% of its 2009 profits – as "shocking".

The current rate of corporation tax in the UK is 28%, although global banks such as Barclays – which has hundreds of overseas subsidiaries, including many in tax havens – do not generate all of their profits in their domestic market.

Max Lawson, of the Robin Hood Tax Campaign, said: "This is proof that banks live in a parallel universe to the rest of us, paying billions in bonuses and unhampered by the inconvenience of paying tax.

"If banks paid their fair share we could avoid the worst of the cuts and help those hit hardest by the financial crisis they did nothing to cause."

UK Uncut, which has also campaigned against Vodafone, Boots and Top Shop, intends to take its first national day of action against the banks on Saturday with protesters expected to bring more than 30 high street branches of Barclays to a standstill.

On Tuesday – when Barclays announced 2010 profits of £6.1bn and a 23% rise in average pay in its investment banking arm, Barclays Capital – the tax campaigners turned a London branch of the bank into a library.

The disclosure of the size of Barclays' corporation tax bill was made in a letter by Diamond to Umunna, who had asked the Barclays boss about the tax paid by the bank when he appeared before the Treasury select committee of MPs last month.

Diamond told the committee that Barclays paid £2bn in taxes to HM Revenue & Customs in 2009, but it is now clear that most of this is payroll taxes for employees. Umunna argued that the sum paid directly in corporation tax to the exchequer is the best reflection of a bank's contribution to the country.

At the time, Diamond said the period of "remorse and apology" for banks was over. Lord Oakeshott, the Liberal Democrat peer who resigned as the party's spokesman in the Lords, said : "I agree with Bob – the time for remorse is past, but what British taxpayers need now is behaviour change from Barclays. Our banks must pay their full whack in corporation tax , not derisory drops in the ocean like this."

Barclays' bill for corporation tax illustrates a dramatic fall in the banking industry's contribution to the exchequer. Before the financial crisis, the industry paid more than £10bn in corporation tax, but this had halved by 2009.

Treasury minister Lord Sassoon admitted this week, in response to a question by former City minister Lord Myners, that while the banks would pay around £20bn in tax in 2010-11 most of that total would be income tax and national insurance paid by employees which the banks hand over on their behalf.

Only 20%, said Sassoon, which would come from corporation tax.

Myners said: "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."

Diamond also confirmed to Umunna that the bank had 30 subsidiary companies in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands but stressed that the bank was making efforts to liquidate some of these of operations in the crown dependencies.

With regards to the Cayman Islands, Diamond was insistent that the majority of these are subject to tax in the UK.

Barclays said it complied with tax laws in the UK and all the countries where it operates and that in 2010 it paid over £2.8bn in taxes in the UK and £6.1bn globally. The £2.8bn UK bill again includes 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."

Umunna blamed the coalition for not being tough enough on banks, but Tories said the Barclays tax bill related to a period when Labour was in government.

A government spokesman said: "As a result of negotiations by this government, banks will pay less in bonuses, more in tax and lend more than they otherwise would have done this year."

Edited by Pole

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+1

You can join in the protests tomorrow. Forget the rain, just wear a coat or bring a brollie.

Don't let them continue to get away with this.

Protest Against The Banks

Strike them down and they will become more powerful than you can ever imagine.

Remember Soros? Imagine an army of Soros'es, deciding the fate of national currencies in a nanosecond.

Our one and only chance to defeat the bankers has passed. Gordon made sure of that, judgement day has been and gone.

Still, maybe in another 80 years or so, the oppurtunity will arise again.

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Strike them down and they will become more powerful than you can ever imagine.

Remember Soros? Imagine an army of Soros'es, deciding the fate of national currencies in a nanosecond.

Our one and only chance to defeat the bankers has passed. Gordon made sure of that, judgement day has been and gone.

Still, maybe in another 80 years or so, the oppurtunity will arise again.

an and whats david and nick doing about it? yer thats right changing the laws regarding taxingf foreign wealth for only large companies why putting up and cuting wealth breaks for the poor.

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I have just checked the facts - Barclays paid £1.17bn in taxes in 2009, compared in £1.4bn in 2008. In 2010, Barclays paid £1.46bn in tax.

The financial statements do not state exactly where they were paid, so obviously there may be truth in them hardly paying anything in the UK, but I think this puts it into some perspective.

Of course the tax still looks tiny compared to the profit of £11bn odd. This is because the operating profit was some £4.5bn. The extra profit came from the sale of Barclays Global Investors, which was a capital gain. Not sure why they did not pay any tax on this - some dodge, no doubt.

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Bailed out

Bank charges and interest non-vatable

Small Companies totally screwed with 28%+ corp tax, 20% Vat, all non-payable by these guys

Not only do the big get bigger, the banks get bigger than the biggest non-banks

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I think lot of people in the UK do not know what a billion is. They don't understand that most of them could not afford the house they now live if they had not bought 5 years plus ago.

What chance do we have.

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The banks run the show and when it goes wrong they know the tax payer steps in.

I wish world governments would close down tax havens and start taxing these organisation.

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I think lot of people in the UK do not know what a billion is. They don't understand that most of them could not afford the house they now live if they had not bought 5 years plus ago. ..

Most people don't know what an interest rate is :D

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Guardian link

Barclays Bank has been forced to admit it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn of profits.

absolutely disgusting. How people can focus on interest rates and benefits payments when this is going on quite beggars belief.

what matters here people is not bashing the concept of banking, which is ancient, but decrying the shameful claims that this is the business in which bob diamond et al are engaged.

The reason these people earn so much money is that they exist in a world subsidized by the rest of us, and if you think raising interest rates is going to change that you are very much mistaken.

The only way to flush these buggers out is to ensure we retain an environment in which their profits are minimised.

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absolutely disgusting. How people can focus on interest rates and benefits payments when this is going on quite beggars belief.

what matters here people is not bashing the concept of banking, which is ancient, but decrying the shameful claims that this is the business in which bob diamond et al are engaged.

The reason these people earn so much money is that they exist in a world subsidized by the rest of us, and if you think raising interest rates is going to change that you are very much mistaken.

The only way to flush these buggers out is to ensure we retain an environment in which their profits are minimised.

It's *unbelievable*. We here time and again 'we're in this together', 'we were left a mess'. OK, whatever the cliche, just make sure that if you WANT to get your house in order, start by the people (a) who caused the bloody crisis and (B) those who can obviously afford it rather than some guy supporting his family on benefit.

Have we just swallowed too much propaganda from the Daily M*il, Express, and anything that comes out of Murdoch's ****?

*this* is what makes my blood boil, not some half-cocked story about a job title in some council somewhere in Liverpool.

Let's get an order of perspective on this. The Banks are the culprits here and deserve to pay, not Joe Bloggs who may be employed by his local council to try generate some local growth.

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Guardian link

Barclays Bank has been forced to admit it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn of profits.

The admission stunned politicians and tax campaigners. It was revealed on the eve of a day of protests planned against the high street banks by activists from UK Uncut, a group set up five months ago to oppose government cuts and corporate tax avoidance.

The Labour MP Chuka Umunna, who lobbied Barclays' chief executive, Bob Diamond, to reveal the tax paid by the bank, described the figure – just 1% of its 2009 profits – as "shocking".

The current rate of corporation tax in the UK is 28%, although global banks such as Barclays – which has hundreds of overseas subsidiaries, including many in tax havens – do not generate all of their profits in their domestic market.

Max Lawson, of the Robin Hood Tax Campaign, said: "This is proof that banks live in a parallel universe to the rest of us, paying billions in bonuses and unhampered by the inconvenience of paying tax.

"If banks paid their fair share we could avoid the worst of the cuts and help those hit hardest by the financial crisis they did nothing to cause."

UK Uncut, which has also campaigned against Vodafone, Boots and Top Shop, intends to take its first national day of action against the banks on Saturday with protesters expected to bring more than 30 high street branches of Barclays to a standstill.

On Tuesday – when Barclays announced 2010 profits of £6.1bn and a 23% rise in average pay in its investment banking arm, Barclays Capital – the tax campaigners turned a London branch of the bank into a library.

The disclosure of the size of Barclays' corporation tax bill was made in a letter by Diamond to Umunna, who had asked the Barclays boss about the tax paid by the bank when he appeared before the Treasury select committee of MPs last month.

Diamond told the committee that Barclays paid £2bn in taxes to HM Revenue & Customs in 2009, but it is now clear that most of this is payroll taxes for employees. Umunna argued that the sum paid directly in corporation tax to the exchequer is the best reflection of a bank's contribution to the country.

At the time, Diamond said the period of "remorse and apology" for banks was over. Lord Oakeshott, the Liberal Democrat peer who resigned as the party's spokesman in the Lords, said : "I agree with Bob – the time for remorse is past, but what British taxpayers need now is behaviour change from Barclays. Our banks must pay their full whack in corporation tax , not derisory drops in the ocean like this."

Barclays' bill for corporation tax illustrates a dramatic fall in the banking industry's contribution to the exchequer. Before the financial crisis, the industry paid more than £10bn in corporation tax, but this had halved by 2009.

Treasury minister Lord Sassoon admitted this week, in response to a question by former City minister Lord Myners, that while the banks would pay around £20bn in tax in 2010-11 most of that total would be income tax and national insurance paid by employees which the banks hand over on their behalf.

Only 20%, said Sassoon, which would come from corporation tax.

Myners said: "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."

Diamond also confirmed to Umunna that the bank had 30 subsidiary companies in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands but stressed that the bank was making efforts to liquidate some of these of operations in the crown dependencies.

With regards to the Cayman Islands, Diamond was insistent that the majority of these are subject to tax in the UK.

Barclays said it complied with tax laws in the UK and all the countries where it operates and that in 2010 it paid over £2.8bn in taxes in the UK and £6.1bn globally. The £2.8bn UK bill again includes 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."

Umunna blamed the coalition for not being tough enough on banks, but Tories said the Barclays tax bill related to a period when Labour was in government.

A government spokesman said: "As a result of negotiations by this government, banks will pay less in bonuses, more in tax and lend more than they otherwise would have done this year."

£6bn of that was a capital gain on disposal of a subsidiary, which had been previously written down in the books. The write-down wasn't allowable as a tax deduction at the time, so the corresponding reversal of that write down isn't taxable.

If you read the accounts, they do explain in what ways the profit declared for tax purposes is different from the profit declared in the accounts. When you submit your tax return to HMRC, the profit declared in the accounts is the starting point, and you list all the ways in which the tax rules for computing your profit are different from the accounting rules to arrive at a higher or lower figure.

Also, they paid a total of just over £1bn in tax. The rest was foreign tax which is deductable from the UK tax bill. In the same way, foreign companies that trade here pay UK tax and deduct it from their home tax bill.

Edited by jonb

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Also, they paid a total of just over £1bn in tax. The rest was foreign tax which is deductable from the UK tax bill. In the same way, foreign companies that trade here pay UK tax and deduct it from their home tax bill.

Don't let facts get in the way of a good story !

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Guest sillybear2

I don't blame them (because they have no just reason nor morals), I blame us for allowing it to happen. If what they are doing is legal then change the law, change the system, stop diffusing the blame, simply legislate.

I suggest you pop down to your local Barclays branch tomorrow and let them know what you think of their lack of reciprocity.

BanklaughDM_468x387.jpg

Edited by sillybear2

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I don't blame them (because they have no just reason nor morals), I blame us for allowing it to happen. If what they are doing is legal then change the law, change the system, stop diffusing the blame, simply legislate.

I suggest you pop down to your local Barclays branch tomorrow and let them know what you think of their lack of reciprocity.

BanklaughDM_468x387.jpg

Even if they did play by the rules the amount of extra tax generated would be squandered by the coalition in about a week. They're still borrowing £10-20bn per MONTH remember. Then when the pension funds fail because they didn't get their Barclays dividend the taxpayer will have to step and provide guarantees, so the net gain would be non-existent.

It's every man for himself now, if I was Barclays' head hincho I'd tell the gov't to swivel on it. I'd honestly rather have bankers spend it on hookers and cocaine than see it wasted on yet more climate change action co-ordinators.

Edited by Chef

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What's the problem. If they had committed any fraud or done anything illegal, HMRC would jump on them in a flash.

Are people suggesting that Barclays should pay local taxes and then also pay them in the UK as well - that sort of flies against just about any tax treaty in the world.

They have structured their business well - that is what their directors are legally obliged to do - their statutory directors' duties require them to do this.

Why not ask yourself how much tax NRK paid last year.

And as for bailouts - are we still on this nonsense - the only reason the banks got collateral advantage out of QE and the ridiculous guarantee scheme was because it was set up for political capital - not for the UK or the banks - and it has permitted continued government waste (both Coalition and Labour).

£11.6 billion is, by the way, about what we INCREASE our national debt by every single month. Where should your anger be directed ? Pouring water into a leaking bucket springs to mind.

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Can anyone clarify something for me?

All this tax business with Barclays, Vodafone, Boots, Top Shop etc. Is that just a canny exploitation of long standing rules about tax havens etc. or has the law been changed relatively recently to make this kind of thing easier?

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Have you heard of The Hartnett Review?

Just about. I have also offshored 2 FTSE members, so now the UK doesn't get any corp tax from them. Why, not because of the tax being collected from them, but because of the risk of what could happen in future. So that's about £100m a year that HMRC (and the UK) is missing out on.

The rules are there - you play by them. If you win, you win, if you lose......

I have just seen some joker on the news - "it is wrong that these companies avoid tax, they should pay more tax to pay for the public sector...." - er, love, if the public sector didn't waste so much money, there would be plenty to go round,.,....

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The banks run the show and when it goes wrong they know the tax payer steps in.

I wish world governments would close down tax havens and start taxing these organisation.

so, FACT 1 Government has no income of its own, it gets it from tax.

FACT 2. A tax haven is a Government that collects little tax.

QUESTION....what is funding the Government and the population of a Tax Haven?

Is it a Donation by tax foreign tax evaders?

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so, FACT 1 Government has no income of its own, it gets it from tax.

FACT 2. A tax haven is a Government that collects little tax.

QUESTION....what is funding the Government and the population of a Tax Haven?

Is it a Donation by tax foreign tax evaders?

Fact 1 is correct. Fact 2 isn't. A tax haven can easily be a country that collects less tax than elsewhere - maybe because it doesn't need to. Because it doesn't chuck it down the public spending black hole on unaffordable pensions and 5 a day co-ordinators.

We don't need to raise any more tax, we simply need to stop wasting what we do raise.

Then there will be lots to pay for the economically inactive (and far fewer of them)

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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