Anger in Britain at Barclays’ tiny corporation tax bill
Barclays has revealed it paid just £113m in corporation tax in 2009, the same year as it made pre-tax profits of £11.6bn.
The details were released in a letter from chief executive Bob Diamond to Chuka Umunna MP, a member of the Treasury Select Committee.
Mr Diamond appeared before the committee on January 11 but could not explain how much of Barclays’ £2bn tax bill in 2009 was corporation tax and how much was payroll taxes from its employees.
“When he appeared before the Treasury Select Committee, Bob Diamond agreed that the payment of tax is one of banks’ key obligations to society,” said Mr Umunna.
“This revelation underlines the Government’s failure to take the robust action needed to make sure that the banks which caused the crash pay their fair share, and will stick in the stomachs of small businesses struggling to borrow and ordinary people feeling the pinch of the Government’s austerity measures.”
Barclays has claimed that its 2009 corporation tax bill was so low because of losses it made on bad loans.
Earlier this week, it reported pre-tax profits of £6.1bn for 2010 and that it paid £2.8bn in taxes but it has not revealed how much of that was corporation tax.
The bank said in a statement: “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 comparison between the two.”
Barclays did not receive a taxpayer bailout but it does benefit from the implicit state guarantee which helped rescue the banking sector at the height of the credit crunch.
The New Economics Foundation estimates the cost of Government supports will be £32.5bn in 2010/11 while the Treasury estimates it will receive £4bn in corporation taxes from all of Britain’s banks over the same period.
Campaign group, UK Uncut, is mounting a series of demonstrations outside Barclays branches on Saturday in protest at what it claims are its excessive profits.
Spokesperson Danni Wright said: “The financial crisis was caused by the reckless behaviour of bankers; a mistake that society has had to pay for in the form of a massive bailout and massive subsidies even to those banks that weren’t bailed out.
“Now the government is not taking any serious action to make these banks pay for their crisis or any measures to stop this happening again.”
Earlier this month, the Government agreed a payback deal with the big four banks, including Barclays, in which they will try to lend £190bn to businesses in the coming year.
Source: Sky News