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Barclays reveals £113m UK corporation tax bill - UPDATED 
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Legend

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Barclays has revealed it paid £113m in corporation tax to the UK in 2009, only 2.4% of its £4.85bn annual profit.

Labour MP Chuka Umunna, of the Treasury Select Committee, who requested the detail, described it as "shocking".

Barclays said that the the amount of corporation tax it paid for the year included losses for the previous year.

The UK tax authorities' relatively low take also reflects the global nature of the British bank, with the bulk of its profits coming from outside the UK.

Mr Umunna said it showed that the bank was not paying its fair share towards a deficit they had helped create, despite having benefited from the government's rescue of the financial system.

Although Barclays was not directly rescued by the UK government - unlike Lloyds and Royal Bank of Scotland - it has been able to borrow extremely cheaply because of the Bank of England's decision to slash interest rates, and because markets perceived that the government would not allow any big bank to fail.

...
Analysis
Barclays has a legal responsibility to its owner - its shareholders - to keep costs including tax to a minimum.

At the same time the Barclays boss himself said that paying tax was one of a bank's key obligations to society.

Many members of that society will not be pleased to learn that only £113m in corporation tax was paid whilst the bonus pool amounted to £3.4bn.
...

The bank announced pre-tax profits of £6.1bn for 2010 earlier this week.
UK vs rest of world

According to Barclays' financial results, the bank paid an "effective tax rate" on its gross profits - which comprises corporation tax paid in all parts of the globe - of 25% in 2010 and 23% in 2009.

This compares with the UK corporate tax rate of 28%.

Some 60% of Barclays profits are earned outside the UK and Ireland, meaning they are subject to corporation tax in other countries.

Typically, HMRC will only charge the difference between the UK's tax rate - if higher - and the local tax already incurred.

However, new tax rules proposed by the coalition government would mean that the UK's banks and other multinational companies would not be asked to pay this tax difference in the future.

"Barclays is a large international banking group with operations in 50 countries worldwide, all of which are subject to close governance and clear disclosure," said the bank in response to the MP's claims.

"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."
Payroll tax

Mr Umunna had questioned Barclays chief executive Bob Diamond about the bank's profits at a Treasury Select Committee last month.

The bank boss had said the bank paid £2bn in taxes to the Revenue - but this included income tax and national insurance contributions paid on employees' salaries.

The total amount paid in corporation tax - which is calculated on the bank's profits - was revealed in response to a follow-up written request from the committee.

According to Lord Sassoon, commercial secretary to the Treasury, the Revenue would expect large banking groups to pay around £20bn in 2010-11.

Of this, 80% would come from from pay-as-you-earn income tax and National Insurance Contributions, and only 20% from corporation tax.

Even so, the level Barclays paid is actually remarkably low, according to Justin Urquhart-Stewart of Seven Investment Management.

The £113m in corporation tax is only 6% of the £2bn total paid to the Revenue.

"But you only have to look at what's happened in the past few years and what levels of perfectly legitimate write-offs banks are able to set off against profits," he added.
'Uncomfortable truth'

Mr Umunna said the relatively low share of tax paid in the UK reflects the government's failure to take the robust action needed to make sure that the banks which caused the crash pay their fair share.

"When he appeared before the Treasury Select Committee, Bob Diamond agreed that the payment of tax is one of banks' key obligations to society," he noted.

"Given that Barclays has benefited from both an implicit taxpayer guarantee and the measures taken to save the banking system in 2008, this raises serious questions as to whether the government is ensuring banks like Barclays are paying a fair contribution to the deficit they helped create."

Tory MP Matt Hancock said that Mr Umunna "has uncovered the uncomfortable truth that under the Labour Government of Ed Balls and Ed Miliband the banks did not pay their fair share".

"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," he added.

According to an agreement with the big four UK banks - dubbed "Project Merlin" - they will contribute £10bn in tax, up from £8bn last year, he said.

http://www.bbc.co.uk/news/business-12511912

That's just... :x

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Last edited by pcernie on Sun Feb 20, 2011 1:10 pm, edited 1 time in total.



Sat Feb 19, 2011 1:58 am
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I haven't seen my friends in so long
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I think the decimal point on the % was in the wrong place, wish they'd do that with income tax...

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Sat Feb 19, 2011 7:48 am
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Legend

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UK Uncut protesters target Barclays over tax avoidance

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barclays protests Demonstrators occupying offices above a branch of Barclays bank in London today. Photograph: Luke Macgregor/Reuters

Protesters have targeted more than 35 branches of Barclays bank, with pickets, poetry readings and even colouring competitions, in another of a series of days of direct action organised by the UK Uncut group.

They were highlighting Barclays' admission that it paid just £113m in UK corporation tax in 2009 – a year when it rang up a record £11.6bn in profits.

Several branches were closed to the public as protesters staged peaceful sit-ins, impromptu reading groups and creches in dozens of cities and towns across Britain, including Edinburgh, Birmingham, Liverpool and Lewes.

At Tottenham Court Road, one of eight branches of Barclays in London to be targeted, some 40 to 50 people heard comedian Josie Lawrence pledge her support, before a group of people held a two-hour sit-in in the bank.

Supporters of UK Uncut said the plan was not to shut the banks down but to "open them up", occupy them and transform them into "something people need but will be cut".

Ruth Griffiths, 36, a UK Uncut supporter, said: "Today we are transforming the banks into schools, leisure centres, and libraries and forests, because it's society that's too big to fail, not a broken banking system."

The group staged "debate" points outside several of the branches and invited passersby to discuss the cuts and the banks. Most of the gathered volunteers said people were angry at Barclays' chief executive, Bob Diamond, saying publicly that the time for banks to apologise was over.

Barclays has been accused of occupying a "parallel universe" following the disclosure that it paid £113m of corporation tax on its £11.6bn of annual profits – a rate amounting to just 1%. The bank revealed the figure in response to questions posed at a parliamentary select committee by Labour MP Chuka Umunna, who described its low level as "quite staggering".

It was a view shared by UK Uncut supporters at the branch protests. One said: "We are here because we are tired of companies ripping off the public and using economies of scale and clever accounting laws to get away with not paying taxes.

"We are tired of us paying into the public sector and seeing our public sector decimated while corporations are effectively getting away with theft. It's legal but immoral."

Emma Draper, 25, who was outside Piccadilly Circus Barclays, said: "The government is allowing banks such as Barclays to get away with not paying huge percentages of their taxes while at the same time slashing public services.

"The cuts are not necessary, they are a political choice because the government chooses to continue to prop up banks such as Barclays instead of funding public services."

Explaining the figures, Barclays said it had operations in more than 50 countries and that it had used legitimate tactics to "carry over" losses made at the height of the financial crisis and to offset these deficits against its 2010 tax burden. Its total bill to the UK taxman was £2m – but most of this comprised payroll tax on employees' wages.

"The corporate tax affairs of an organisation with the global footprint of Barclays are complex, and not reducible to simplistic comparisons," said a Barclays spokesman.

But Umunna, who sits on the Treasury select committee, said the figure was totally inadequate: "We need to ensure the banks make a fairer contribution to reducing the deficit that they helped to create."

Campaigners have contrasted Barclays, which paid out £2.5bn in salaries and bonuses last year, to the austerity squeezing the broader population. Max Lawson, a spokesman for 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."

http://www.guardian.co.uk/uk/2011/feb/1 ... -avoidance

Awesome :D

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Sun Feb 20, 2011 1:09 pm
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My father had a call from Cherry, his contact at Barclays, who deals with his finance stuff.
She was calling to say that she's not going be to dealing with his stuff any more, as they've fired all their personal finance advisor people.
Apparently the excuse was that the bank didn't make enough profit to keep them employed.

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Sun Feb 20, 2011 5:20 pm
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