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Lloyds Will Not Pay Corporation Tax Until Profits Hit £15Bn

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http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8348764/Lloyds-will-not-pay-corporation-tax-until-profits-hit-15bn.html

The admission came as Eric Daniels, the bank's outgoing chief executive, courted further controvery by saying he would only decide whether to accept a £1.45m bonus once the money was in his "hot little hands".

Mr Daniels' comments, apparently in jest, were made ahead of his stepping down as Lloyds chief next week. He will be succeeded by António Horta-Osório, the former Santander UK boss.

Lloyds, which is 41pc owned by the state, is able to avoid corporation tax as it has billions of pounds of deferred losses that it can write off against tax liabilities.

Barclays was criticised last week after it revealed it had only paid £113m in corporation tax in 2009, despite making a pre-tax profit of £11.6bn. The bank was able cut its UK tax bill by writing off losses made on US sub-prime investments.

Lloyds' admission drew criticism from Lord Oakeshott, the former Liberal Democrat treasury spokesman. "Yet again we see British banks paying far less than they should in corporation tax, meaning the rest of the British taxpayers have to pay more," he said.

On Friday the bank reported a pre-tax profit of £2.2bn for 2010, its first annual profit since taking over troubled lender HBOS in late 2008. However, because of the large losses the bank holds on its balance sheet, it paid no corporation tax on last year's profit.

"I would have loved to have paid tax because that would have meant we were making more money," said Tim Tookey, finance director.

"We look forward to the day we are making higher tax payments," he said, adding that the bank had £6bn in deferred tax assets that it can write off against corporation tax.

UK corporation tax is paid on statutory profits, which last year totalled £281m, meaning the bank avoided paying £79m in tax in 2010 through its use of deferred tax assets.

At this level of statutory profit, it would be more than 50 years before Lloyds began paying tax. However, deferred tax assets can only be written off against a company's tax bill for about five years.

Meanwhile the lowly paid taxpayer continues forking out every greater amounts to subsidise the bankers. It's a fantastic system the rich get to avoid paying tax, meanwhile the poor can't escape paying it.

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Meanwhile the lowly paid taxpayer continues forking out every greater amounts to subsidise the bankers. It's a fantastic system the rich get to avoid paying tax, meanwhile the poor can't escape paying it.

It's the new world order, the taxpayers are now serfs working for the bankers to keep them in Champagne, Caviar and £10,000 a night hookers.

What adds insult to injury is the a-holes don't even send us a Christmas card saying thanks :lol:

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It's the new world order, the taxpayers are now serfs working for the bankers to keep them in Champagne, Caviar and £10,000 a night hookers.

What adds insult to injury is the a-holes don't even send us a Christmas card saying thanks :lol:

And who do you think would end up picking the tab for that up! We'd be paying for our own bleedin cards!

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it's corporation tax. Are you lot really serious ? They are carrying forward losses. Just like anybody else. Some of you are utterly bizarre ....... or should it only be the companies you deem worthy enough that are able to do this..... ?

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it's corporation tax. Are you lot really serious ? They are carrying forward losses. Just like anybody else. Some of you are utterly bizarre ....... or should it only be the companies you deem worthy enough that are able to do this..... ?

Seems you can carry forward losses and then pay bonuses, surely if you are carrying losses you make up the loss before paying a bonus?

Plus both RBS and Lloyd's only exist because of the taxpayer writing them a blank cheque, yes I realise Lloyd's would probably be OK if it wasn't for the decision to buy a turd.

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Seems you can carry forward losses and then pay bonuses, surely if you are carrying losses you make up the loss before paying a bonus?

Plus both RBS and Lloyd's only exist because of the taxpayer writing them a blank cheque, yes I realise Lloyd's would probably be OK if it wasn't for the decision to buy a turd.

If I work my nuts off and do a good job and I make a good profit, if you don't pay me the market rate (which in banking, includes a healthy bonus), I will leave and you won't make money off my back next year....... so you lose even more.

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If I work my nuts off and do a good job and I make a good profit, if you don't pay me the market rate (which in banking, includes a healthy bonus), I will leave and you won't make money off my back next year....... so you lose even more.

And if you lose a load you lose your house and salary because we're going to put a charge over your house to cover your losses. If you don't like it we'll need to insure ourselves against that by paying you less, cos the gov sure isn't going to insure us any more.

The way it should be in a true market, which this industry isn't.

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And if you lose a load you lose your house and salary because we're going to put a charge over your house to cover your losses. If you don't like it we'll need to insure ourselves against that by paying you less, cos the gov sure isn't going to insure us any more.

The way it should be in a true market, which this industry isn't.

Ridiculous. I am (in this theoretical world) and employee. Are you expecting every single public sector worker to have a charge over their houses to pay for the state overspend and the waste in it ? Or is that limited just to people you don't think deserve it ? Because in effect, that's what you are asking for - you are asking, say someone who does IPOs to stand by the people who do derivatives, or those who do prop equities trading to stand behind the retail bankers. OK then, binmen will all be responsible for the losses caused by civil servants......

So all those Woollies em,ployees should have lost their homes,. Or all the Rover ones. You lot at times really are crackers.......

Edited by Rachman

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If I work my nuts off and do a good job and I make a good profit, if you don't pay me the market rate (which in banking, includes a healthy bonus), I will leave and you won't make money off my back next year....... so you lose even more.

Bankers threatening to leave the UK are like fleas threatening to leave a dog. Parasites need a host.

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it's corporation tax. Are you lot really serious ? They are carrying forward losses. Just like anybody else. Some of you are utterly bizarre ....... or should it only be the companies you deem worthy enough that are able to do this..... ?

+1

Of all the huge long list of things that its possible to criticise UK banks for, I find it completely bizarre that people choose the fact that they carry forward losses against tax to complain about. Something that any business can do, and in fact does by default. You don't even have to elect to do it, HMRC just assumes by default that's what you want to do and won't let you pay any corporation tax until the loss is gone. This applies to any UK company from a bank to a one-man-band plumber in a rusty Transit van.

I suspect equally that people who moan about the banks using a deferred tax asset against tax have absolutely no idea what a deferred tax asset actually is ...

Edited by Neil D Possitt

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Bankers threatening to leave the UK are like fleas threatening to leave a dog. Parasites need a host.

You sold many Socialist Workers recently ? Even the Daily Mirror readers don't believe that.

I wonder if you'd even be allowed to leave Tooting.....

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According to the banks, it's actually capital.

EDIT: By the way, had you considered that if they had not been paying themselves obscene sums over the last decade for essentially skimming the wider economy, and retained in the business that they would not actually have registered any losses?

My definition of a good working financial services sector is that it allocates capital efficiently to the rest of the economy and we would see that in the prosperity of our businesses, the quality of our homes and public services. But it's not there is it - why not? Because most of the profits of the City have been about pumping credit from oversees investors into the housing market where it obtains a yield, or selling off what is left of our trading industry.

So, you are basically a socialist.

These are private companies - they exist for the good of their shareholders - when the State ran its own bank, Girobank - it effed that up in style. I simply don't believe that anyone who isn't just trolling would think that they should all get paid the same as, say, a shelfstacker for 90 hour plus weeks ( I won't say under pressure, because it will just be thrown back that working in A&E is pressure, it's life and death etc....)

If the money had been kept in the companies (in the UK), they would have all been bought out and be owned by foreigners ....... lots of cash in a business is a dangerous asset to have - other people covet it. Not just the governments either.

Can you tell me, what do you think a prop equities trading team whose desk made £500M profit this year should get in their bonus pool ? Let's say they are on £100K basics.

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If I work my nuts off and do a good job and I make a good profit, if you don't pay me the market rate (which in banking, includes a healthy bonus), I will leave and you won't make money off my back next year....... so you lose even more.

Make money off your back?

Do you need reminding how much money the UK taxpayer has had to put up to keep the banks in business?

Many of the so called profits that bonuses have been paid on in the past proved to be nothing of the sort and many bankers shouldn't have actually got bonuses.

It's about time we had a banking system that worked for us not the spits in the city.

Andy

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According to the banks, it's actually capital.

A deferred tax asset or liability arises due to a temporary timing difference between when an item is shown in the profit & loss account and when it is allowable for corporation tax purposes. Due to difference between accounting standards and tax legislation they are not always the same. It makes not the slightest bit of difference to the total amount of tax a company pays over its lifetime as by definition the timing difference will reverse at some point.

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Make money off your back?

Do you need reminding how much money the UK taxpayer has had to put up to keep the banks in business?

Yes I do, I would LOVE to hear what cash the taxpayer has spent on the banks, And what it currently holds in return. And if you could please reference that aggregate total as a proportion of the annual budget deficit which is consistent government overspend I'd appreciate it tool.

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Based on what I said, that should be the opposite take. :blink:

Read again, I'm saying we have not had a well functioning capitalist system. The evidence is there for us to see. I see a wasteland of industry beyond the South East. Whereas the City formerly lived off this and the commodities from the colonies that fed this industry, we now see that the former parasite has killed its host. That parasite now seeks its food elsewhere in the rest of the world and makes transfer payments to the rest of the country, so that now in a bizarre twist, the former parasite now resembles the host. It needs downsizing to create room for the rest of the economy.

Banking didn't kill the rest of the country.

The mills shut because we as a country wouldn't pay for clothes produced in them,

The pits shut because we as a country wouldn't pay extra for British Coal.

the car industry died because of the crap quality (of some), the crap management, the ridiculous employees' attitudes to quality, the unions and the fact we as a country have no loyalty to our car industry.

The steel industry died because we as a country wouldn't pay for goods produced in them

Many of those industries were dying already - even before WWII. The areas need to change, or they die out. Instead, people refuse to change and just look to blame someone else... it's never up to them, someone else must be to blame....

It is not the bankers' fault that we choose on price.....

No, I don't work for a bank, but have done global corpfin transactional work since I left university - working with, for and against banks, trying to get money out of them for businesses, to build, expand, buy companies, deal with insolvent ones..... as well as acting for them to protect their investment in companies and reduce their risk....

Edited by Rachman

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Yes I do, I would LOVE to hear what cash the taxpayer has spent on the banks, And what it currently holds in return. And if you could please reference that aggregate total as a proportion of the annual budget deficit which is consistent government overspend I'd appreciate it tool.

The budget deficit is a completely different kettle of fish and separate from the banking crisis (ignoring the banking crisis killed the sale of houses at inflated prices so stopping the tax revenue for the treasury)

If the UK government hadn't put explicit guarantees up and measures such as the special liquidity program etc. then the banking system would have gone under.

And the banking system would have gone under because bankers were busy making bad decisions (as were many borrowers), now banks are busy playing intetest rate arbitrage and syphoning money out of the taxpayer again.

Andy

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Well, let's hope he includes all elements, such as the money printing, the maintenance of high asset prices that price our young out of property and pensions to pay for their old age. It includes the massive devaluation of the pound (40% at peak), it includes the hiigh inflation we are experiencing especially imported commodities like oil. The near 0% interest cost for savers. The extraordinary steps to prop up the housing market with tax money . The bailing out of car manufacturers and house builders etc - not just banks. It includes the higher levels of unemployment and sad levels of youth and graduate unemployment that will blight the rest of their lives.

Mervyn puts the cost of the 'subsidy' to UK banks at above £30bn a year.

How much do you think it is? And after that, come round with a hat and see how many would be willing to put their money in freely.

Merve talks carp. We all know that. But even accepting that £30Bn, that's about 75 days of state overspend.

The pound was not devalued to save the banks. It was devalued to save the people. Are you seriously suggesting that the inflation in oil is the banks fault ? When the government takes 30 X the amount of money out of it in the UK (as petrol/diesel) than the profit the oilcos take.

I fully agree about the insanity of propping up the housing market - but it's been done for political and particularly electoral reasons - the banks didn't do it. The cxar scrappage scheme actually made a net positive return for the Chancellor, BTW..... the government took more money in than it otherwise would have - because so many people scrapped decent cars to get Korean shtiboxes..... well thought out lads..... - all they have done is put second hand car prices up so the hard working low paid are finding it harder to get a decent one now....

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So, you are basically a socialist.

These are private companies - they exist for the good of their shareholders - when the State ran its own bank, Girobank - it effed that up in style. I simply don't believe that anyone who isn't just trolling would think that they should all get paid the same as, say, a shelfstacker for 90 hour plus weeks ( I won't say under pressure, because it will just be thrown back that working in A&E is pressure, it's life and death etc....)

If the money had been kept in the companies (in the UK), they would have all been bought out and be owned by foreigners ....... lots of cash in a business is a dangerous asset to have - other people covet it. Not just the governments either.

Can you tell me, what do you think a prop equities trading team whose desk made £500M profit this year should get in their bonus pool ? Let's say they are on £100K basics.

If they are private companies that exist for the benefit of their shareholders can you tell me why the employees of Barclays made more in bonuses than the shareholders in dividends especially as the shareholders actually take the risk!

Also perhaps you can explain how an equities trading desk can actually have made a profit when the stock market has gone nowhere over the last ten years - investors had done badly but the boys on the inside seem to have done extraordinarily well.

Andy

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I can understand your need to think that what you are doing day to day is of value and therefore to avoid cognitive dissonance your defence mechanisms are particularly strong. So I'll leave you to it.

Think about it once you get to retirement and look back and think critically on what you achieved beyond your own enrichment.

ah, ad hominem time. Is it because I am not making any less sense than anyone else ?

So, the thousands of people I have kept in jobs by negotiating new terms with their lending banks, or by ensuring that they were able to expand their business to grow won't matter. In fact, because I have never (been paid to) pick up a shovel and dig something out of the ground and hand carve it into something and use it, therefore I must be a sharp suited nefarious troglodyte...... seriously, you'll have to do better than that....

Or maybe, I'll just sit back, look at my hopefully healthy family and beautiful wife and go sip another G&T. I will have given my kids a good education and instilled right from wrong and given them a good chance to make their own way in life..... hopefully. If not, I'll just tell them I played piano in a whorehouse, badoomtish.

If they are private companies that exist for the benefit of their shareholders can you tell me why the employees of Barclays made more in bonuses than the shareholders in dividends especially as the shareholders actually take the risk!

Also perhaps you can explain how an equities trading desk can actually have made a profit when the stock market has gone nowhere over the last ten years - investors had done badly but the boys on the inside seem to have done extraordinarily well.

Andy

Are you serious ? Really ? And if you can't work out yourself why some equities trading desks can make a large year on year profit in a flat market...... I suggest you really do stop asking questions like this.... because they are simply better at it. Edited by Rachman

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I thought you called me a socialist first?

I am heartened to see you saw it as a slight ! :) If we can get you trading pork belly futures, we could do something with you.... Edited by Rachman

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Lloyds will be paying pretty soon then I see.

As Q1 GDP will be negative = double dip. So they will print more money to 'lock in the recovery' 4 trillion or so ought to be enough for the first couple of days. And ping What used to be 1 million profit is now 150bn!

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ah, ad hominem time. Is it because I am not making any less sense than anyone else ?

So, the thousands of people I have kept in jobs by negotiating new terms with their lending banks, or by ensuring that they were able to expand their business to grow won't matter. In fact, because I have never (been paid to) pick up a shovel and dig something out of the ground and hand carve it into something and use it, therefore I must be a sharp suited nefarious troglodyte...... seriously, you'll have to do better than that....

Or maybe, I'll just sit back, look at my hopefully healthy family and beautiful wife and go sip another G&T. I will have given my kids a good education and instilled right from wrong and given them a good chance to make their own way in life..... hopefully. If not, I'll just tell them I played piano in a whorehouse, badoomtish.

Are you serious ? Really ? And if you can't work out yourself why some equities trading desks can make a large year on year profit in a flat market...... I suggest you really do stop asking questions like this.... because they are simply better at it.

No, go on explain - you seem to believe bankers and their ilk are worth what they earn explain why!

Explain why fund managers lending stock so others can short it deserve anything other than hanging by the people whose money they invest.

Explain why private equity firms can borrow large sums of money to buy businesses and then attach that debt to the business.

Explain why bankers get paid bonuses based on profits that in later years turn out not to been profitable.

Explain why everyone seems to work for the bankers instead of the bankers working for us.

Andy

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Financial service profits are based on complexity, asymmetric knowledge and the miss-selling of risks on the whole.

I know but our friend from finance sector doesn't want to admit this...

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  • 311 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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