Barclays £119m tax bill inflames protesters
Protesters from UK Uncut targeted nearly 50 branches of Barclays Bank on Saturday in a “bail-in” action to protest at the bank’s tax and bonus policies.
Without closing the branches, activists took up residence in the banks for the morning and turned them into creches, meeting places, and in the case of the Tottenham Court Road branch in London, a venue that featured an appearance by comedian Josie Long.
On the morning of the action, The Guardian published figures showing that Barclays paid £113m in UK Corporation Tax on its 2009 profits of £11.6bn.
Labour MP Chuka Umunna released the figure from a follow-up letter sent by Barclay’s chief executive Bob Diamond after his recent appearance before the House of Commons Treasury select committee.
Diamond had told the committee that Barclays paid £2bn UK taxes in 2009, but the detailed letter revealed that around 80% of that figure was made up from employees’ payroll tax contributions. Average pay in the bank's investment arm has increased by 23% in the past year, and Diamond himself - famous for claiming "the time for contrition is over" - is rumoured to have earned a bonus of £9m.
Tax Justice blogger Richard Murphy estimated that Barclays’ total tax bill for the year (ignoring deferred tax) was roughtly £1.3bn, of £200m related to the sale of Barclays Global Investors.
A note in its accounts indicated that 78% of its profits came from Barclays Capital, Murphy noted, which he suggested was mainly located in London and New York. Yet less than 10% of Barclays’ corporate tax bill was paid in the UK.
Barclays was able to transfer revenues generated in the UK to lower tax jurisdictions. In his letter to the Labour MP, the Barclays CEO confirmed the bank had 30 subsidiary companies in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands. Howevr he added that the bank was running down some of its subsidiaries in Crown dependencies.
However Barclays was also able to lessen its UK tax bill by claiming back losses from the previous year, Murphy said.
In a separate post, he quoted an estimate from the TUC Corporate Tax Gap report that UK banks would be able to offset around £19bn from their losses during the financial crisis.
The government could easily retrieve this sum, he argued, by introducing legislation to blocks banks carrying forward these losses. “It’s a one line new piece of law that is needed,” he wrote.
While chancellor George Osborne floated this idea while in opposition, The Guardian reported on Saturday that he now favoured continuing with the bank levy first introduced by Labour in 2009.
You might also be interested in
AccountingWEB’s interim Editor in Chief has been with the site since 1999 and returned to the editorial hot seat in March 2020 to lead the hunt for a long-term successor... Send a DM if you're interested! When not tending to the needs of AccountingWEB members and geeking out on their technology habits, he devotes much of his time to his oddball...