Seven out of 10 largest foreign banks pay no UK tax; Labour wants tougher approach.
Two more investment banks have reported paying zero tax in Britain in 2014, prompting the opposition Labour Party to urge the government to reverse a tax change it made for banks last year.
Citigroup and Credit Suisse disclosed that their main UK subsidiaries paid no corporate income tax in 2014, the most recent year for which figures are available. This means seven of the 10 biggest foreign investment and commercial banks operating in Europe's main investment banking center have said their main British arms paid no tax in that year.
In total the 10 banking groups generated over $40 billion in fees in Britain in 2014, reported $6.5 billion in profit and employed almost 50,000 people. But they contributed just $205 million in corporate income tax.
"These are damning findings that make a real mockery of the government’s approach to taxation of the financial sector,” said John McDonnell MP, the opposition Labour party’s shadow finance minister.
In July, following pressure from banks which threatened to move operations from London, Finance Minister George Osborne said he would halve a levy banks must pay as a percentage of their assets, and he would restrict the base on which it is calculated. At the same time he increased the tax rate banks must pay on corporate income, to 8% above the standard rate.
Tax experts, however, say corporation tax is easier to avoid than the bank levy. McDonnell said the figures showed Osborne was already pursuing a “soft touch” approach. "This report should be setting off alarm bells at the Treasury and he should be reversing his decision on the bank levy immediately,” he said.
Tax avoidance has become a hot political topic in Britain after revelations in recent years of profit shifting by big groups including Apple Inc. and Amazon. Of the 10 biggest foreign investment banks measured by fee income, only three paid corporate income tax in 2014. Goldman Sachs Group Inc paid $27 million in tax on $2 billion of profit generated by its London arm, while Switzerland’s UBS Group AG paid $4 million on $140 million in UK profits. Both declined to comment.
The biggest taxpayer of the 10 was Paris-based BNP Paribas, which paid $174 million on $954 million profit generated by its UK unit, which focuses on investment and commercial banking. "BNP Paribas is determined to do its civic duty in the field of taxation,” the bank said in a statement.
It is not possible to compare the contributions of British banks including Barclays and HSBC, because even though they have large investment banking businesses, their country-by-country reports also include taxes paid on retail operations. Barclays declined to comment and no-one from HSBC was available.
At: http://uk.reuters.com/article/us-britain-banks-tax-idUKKBN0UH0DN20160103
= new reply since forum marked as read
to do my civic duty.
"BNP Paribas is determined to do its civic duty in the field of taxation,” the bank said in a statement.
