News
Barclays Ordered to Pay Back £500m In Avoided Tax
28 - 02 - 2012
Reports suggest that Barclays Bank has been ordered by the Treasury to pay £500m in tax which it had tried to avoid.
It appears that Barclays disclosed the two schemes to HMRC under rules which have been in place since 2004.
One of the schemes was a way of avoiding corporation tax payments when a bank buys back its own debt.
One of the schemes was a way of avoiding corporation tax payments when a bank buys back its own debt.
The other scheme, exploiting provisions of regulations on Authorised Investment Funds, seeks to generate tax credits when tax has not been paid.
In an unusual step, the government has introduced retrospective legislation to end such "aggressive tax avoidance" by financial institutions.
The Banking Code of Practice on Taxation – introduced by the Labour Government in 2009 and supported by the Coalition Government the following year - demands that banks ensure that their tax and the tax obligations of their customers are observed.
Barclays is one of the 15 top banks operating in the UK that has adopted the Banking Code of Practice on Taxation.
The government has closed the schemes to retrieve £500m of lost tax and safeguard payments of billions more tax in the future.
