Cormac Hollingsworth explains how the warning signs for Barclays’s tax-dodging were there back in 2008.
As Lord Wood said today:
“The occupy protest against corporate greed in London was disbanded on the day Barclays were revealed to have used a loophole to avoid paying £500 million tax.”
Cormac Hollingsworth explains the background behind the Barclays deal…
Bob Diamond’s Barclays Bank has been caught by the UK tax man trying to help two clients avoid tax on half a billion pounds, it was revealed by the FT yesterday (£).
The tax authorities described the schemes as “highly abusive” and HMRC are changing the law to close the loopholes exposed.
Bob Diamond, the man who a year ago told the Treasury Select Committee that “the time for banker remorse is over,” is clearly taking this beyond the boundaries of acceptability.
As Richard Murphy has blogged last night, Barclays had signed a code of conduct on taxation that these transactions explicitly looked to dodge.
But the warnings were there, back in the financial crisis.
Barclays shareholders were up in arms at the deal that Bob Diamond cut with the Qatari and Abu Dhabi states that bailed out Barclays bank to the order of £7 billion. The deal paid 14 per cent, while a comparable deal from the UK government was a 12 per cent coupon (for example, that’s what RBS had to pay).
There had to be a reason why Barclays board preferred to pay the higher coupon to avoid the UK becoming its shareholder, and that reason is now clear. With the UK government as their shareholder, their highly abusive tax deals would have been stopped.
See also:
• ECB bailing out British banks exposes coalition’s finance failure – Cormac Hollingsworth, February 27th 2012
• Transparency, accountability, responsibility: Miliband’s “one nation banking” principles – Shamik Das, February 3rd 2012
• A word for 2012: Liquidation – Cormac Hollingsworth, January 4th 2012
• Implementing Vickers won’t stop the next crisis – Josh Ryan Collins, December 20th 2011
• The challenges for Labour in developing a credible banking regulation policy – Matthew Pitt, September 2nd 2011
17 Responses to “The warnings about Barclays’s tax-dodging greed were there in 2008”
gerard dean
RT frm earlier: The warnings about Barclays’s tax-dodging greed were there in 2008, writes @CormacHolly: http://t.co/noKu3HWI
JC
If our politicians are so useless that they can’t define what tax a company should pay, we should be lobbying them to change the tax system. Complaining about companies that ask whether a method is legal is pointless.
And I agree with LordBlagger, the idea that a government can make something illegal that was legal when it happened is uncomfortable. It makes it very difficult for companies to plan ahead.
Anonymous
The aren’t getting off taxes.
The law was the law. Barclay’s paid what was due under the law of the land. They complied fully.
The government didn’t like that, so it retrospectively changed the law just to get Barclays and 500 million in extra taxes.
The national debt is going up because the government is spending more than it earns, and putting its debts off the books.
So, challenge for you, because its the question the left won’t answer.
How big are are all the off the book debts such as PFI and pensions. [Hint, its around the 6 trillion mark]
Also how about some retrospective taxation for the tax evading Guardian and Ken Livingstone. Should the law be retrospectively changed to get them?
Anonymous
In addition the real problem is the message it sends. The UK has a government that won’t honour its promises or even keep to the law. It will make it up as it goes along.
Given the choice as to where to open a new business, the UK looks less and less attractive.
Couple that with the wide spread corruption from MP and Peers on their expenses (Still being covered up by Civil servants like David Beamish making it a state secret), to police and officials being bought by Murdoch and others.
It’s going all Lagos in the UK.
Cormac Hollingsworth
While Barclays takes another bailout from another country £7bn from the ECB this week all to finance more tax positions http://t.co/bHqLF2tJ