Barclays Bank Pays 1% Corporation Tax

[RonJeremy]

It's refreshing to find a forum where some sense is being spoken, particularly by Ron Jeremy and Foxy Lady!

 

I find it incredible that so many people are unable to make the connection that if there are no profitable businesses, then there is no funding for hospitals, schools and so on. That doesn't mean to say we should be slaves to the needs of businesses, but a balance does need to be struck, and if the banks and other businesses were more successful there would be no need for cutbacks at all!

 

It's hard to equate just how much the UK economy depends on banking since the media prefer to give half-cocked inflamatory stories instead of hard fact. But the fact that a labour government who refused to bail out other industries bailed out the banks gives some indication that even they realised their importance.

 

And even the Guardian reluctantly hinted that the banks are important to the UK economy when they were discussing December's record trade deficit:

 

guardian.co.uk/business/2011/feb/09/uk-trade-deficit-hits-record

 

"Britain's services sector, including the resurgent banks, ran up a surplus of £4.4bn in December, but that was not enough to offset the £9.2bn shortfall in goods"

 

They didn't quote a figure or percentage of the banking share, so it must have been high!

 

We hear a lot about the bail out, but very little about the contribution the banks make to the economy in the good times.

 

For example, an interview in the guardian with the boss of Barclays in 2007 mentioned that they paid (from memory) 3 billion in UK corporation tax that year - in their words paying for a lot of hospitals, schools etc. Either I just can't find that article now, or for some strange reason it has vanished! Funny that!

 

Likewise, we hear a lot about "fat cat" bonuses, but in order to get a £100K bonus, you'd hope that they made significantly more than that for the company, which in turn is good for the economy.

 

It's ironic that the banks get so much criticism on the internet, it reminds me of the 70s car sticker campaign "don't critisize farmers with your mouth full!". Without investment banks the internet would still be a geeky toy in academia. With the benefit of hindsight of course bringing the internet into peoples homes was a sound investment, but in the early 90s when most people didn't have a PC (which cost over a grand) modems cost £200+, a dial up account cost £10 Per month + call charges whilst you were online, and there was very little content, it was brave investors that backed it, and now we all benefit from it.

 

The guardian article linked by the op doesn't tell us how much relief was due to bringing fwd losses from previous years, (shoddy journalism) but there is a valid point about firms increasingly using offshore facilities to avoid tax.

 

You can't blame the companies - they exist to make as much profit as possible, and though I'm usually equally critical of labour, tories and libs, I can see their dillema that if they push too hard to get firms to pay their tax in the UK then they will just move their HQs. Barclays did apparently pay 2 billion in tax on their wage bill, which they wouldn't if all their key staff moved to a more business friendly regime.

 

The only way to make companies stop using tax avoidance schemes is to register our dissaproval by avoiding their products. If we all stopped shopping in Boots, perhaps they would still be back in Nottingham. If you don't like some of the murkier practices of the high st banks, move your account to the co-op who at least have an ethical banking policy (or if you really don't like banks, put your cash under your pillow).

 

No point in blaming "the market" - we ARE the market!

 

A very good point about Santander, nobody complains when a Spanish bank buys up half our high street and pays tax in Spain rather than here, but when an indigienous bank has the audacity to make a profit, everyone goes off on one!

 

I'm not a banking fanboy (indeed I moved my own account to the co-op in the 90s when I found out about harmful 3rd world currency speculation and other vulgar harmful practices) but we do need to understand the importance of banking (rather than just jumping on populist media fuelled bandwagons) and learn how we can make a difference, instead of just moaning.

 

Whilst we're complimenting each other...

Welcome to the forum, and what an excellent first post.

[Douglas J]

Vodafone pays just £1,400 tax on profits of £3.5bn.

 

It's just been revealed that Vodafone paid nothing more than £1400 out of £3.5 billion. does anyone on here feel they contribute more to the country than Vodafone?

 

http://www.thisismoney.co.uk/money/markets/article-2049496/Vodafone-pays-just-1-400-tax-profits-3-5bn.html

[GreenManWalk]

Vodafone are a disgrace - they wined and dined the head of HMRC over their previous debts and got them written off - now it seems its business as usual and as usual its the tax payer of UK who will miss out.

[Rupert_Baehr]

I have large shareholdings in Santander Bank amongst others.

On a declared profit of 8.9 billion Euros they paid shareholder 4.9 billion Euros in dividends, which were taxed in Spain. ...

 

And I think you'll find that the reason the profits were taxed in Spain is because - under the interpretation imposed by current law - they were earned in Spain.

 

The UK government got no revenue from this despite the bank being one of the largest presences in the UK high street.

 

A big presence (lots of accounts, lots of offices) in the UK, but - at law - the profits were made elsewhere. Santander is not a UK based bank and they will (quite reasonably, IMO) exploit the law to their advantage.

 

The British government could always change the law ... provided they are careful. There are numerous highly-profitable British companies overseas who might fall foul of such changes ... particularly if they were invoked everywhere.

 

 

Had the bank been a UK based bank such as Barclays the UK government would have pocketed 490,000,000 Euros of tax on those dividends.

Santander also declared their profits of around 3 billion Euros in Spain and so the UK government again took no share of those tax revenues either.

 

Why on earth should a foreign company (Santander, a Spanish company) which makes profits in a foreign country (Spain) pay British taxes on those profits?

 

How much money does General Motors (for instance) pay to the UK Exchequer on its non-UK profit?

 

2 years ago. HSBC Bank's chairman moved his base from London to Hong Kong, and the bank is still considering where its headquarters should be...

 

HSBC. That would be the Hong Kong and Shanghai Banking Corporation. The Chairman went home (they came to the UK because the taxes made such a move advantageous. There is no longer an advantage in being here. So the chairman went home.

 

Is anybody surprised?

 

They might decide to move more of their operations out of the UK. Their choice.

 

It is little things like governments medalling with a banks bonus structure that can influence these decisions. A bank will base itself where it has maximum advantage and is able to employ key personnel.

 

Should a bank like HSBC or Barclays choose to move its HQ overseas vast amounts of tax on high incomes, share dividends and corporation tax will be lost, and it could all be down to a government reacting to placate a load of loud mouths who regard anyone on a high salary as an overpaid fat cat.

 

I suspect I'm preaching to the choir (and you are a well-paid banking executive.) If so, good luck to you!

 

Ideally an employee is paid what (s)he is worth. If (s)he isn't paid as much as (s)he thinks she is worth, (s)he has 2 options: Find a better job which pays more elsewhere or work for yourself.

 

I did both.

 

'Could've done better' (I suppose) but I'm not complaining.

 

The world doesn't owe anybody a living. If all the good jobs in the UK go elsewhere, all the good people will follow them. Rather quickly.

 

There's nothing new about that - it happened 50 years ago.

 

I've just moved house. My 37th house move since I was 18. (Hopefully my last move) The other moves weren't because I didn't like the neighbourhood, but rather I moved for the job ... and the money.

 

If you want a job, you can stay where you are and take whatever you can get or you can go to where the jobs are.

 

I've been there. 36 times.