Barclays Bank Pays 1% Corporation Tax

[foxy lady]

everyone avoids tax. Perhaps everyone could leave.

 

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

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.

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.

[RonJeremy]

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

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.

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.

 

You seemed to be arguing against them being based in the Uk in the previous post, but in the above you argue for them to be based here. Have I just missed the "sarcasm" smilie? Or should that be a sarchasm on my part?

[foxy lady]

You seemed to be arguing against them being based in the Uk in the previous post, but in the above you argue for them to be based here. Have I just missed the "sarcasm" smilie? Or should that be a sarchasm on my part?

 

I was being ironic in post 79. I had just assumed that it was so obvious I hadn't bothered with a smilie.

[RonJeremy]

I was being ironic in post 79. I had just assumed that it was so obvious I hadn't bothered with a smilie.

 

Sorry - definite sar-chasm

[foxy lady]

Sorry - definite sar-chasm

 

Hi Ron. I think my point is that it is very easy to move a financial institution to another country. If you put too many hurdles in from of them they refuse to jump, clear off and the country lose the lot.

[RonJeremy]

Hi Ron. I think my point is that it is very easy to move a financial institution to another country. If you put too many hurdles in from of them they refuse to jump, clear off and the country lose the lot.

 

I now get your point, and entirely agree with it. I did not to begin with. My inability to recognise irony.

hence sarchasm: The abyss between the creator of witticisms and the intended recipient who does not recognise the humor in it.

[Rupert_Baehr]

Barclays Bank have admitted that they paid just £113m of Corporation Tax in 2009, despite making almost £12bn of profit. Link here

 

Is it time that the Government actively pursued the banks to force them to pay their way?

 

Or is it ok that they can avoid tax and still pay huge bonuses?

 

Should we be thankful that they are here at all.. after all, they could always take their 1% contribution to a country with lower taxation.

 

The article you quoted says: "The current rate of corporation tax in the UK is 28%, although global banks such as Barclays – which has hundreds of overseas subsidiaries, including many in tax havens – do not generate all of their profits in their domestic market."

 

So Barclays paid 1% of their global profit to the UK as Corporation tax. What percentage of their UK generated profit did they pay to the UK in corporation tax? How much corporation tax did they pay in other countries?

 

I wonder what percentage of their global profits Nissan paid to the UK as corporation tax last year? Or General Motors? or Honda, BMW, General Foods, or the host of other multi-national corporations with branches in the UK?

 

With the next few years worth of decreases in the rate of corporation tax they will only have to pay -3%! (We would have to pay them!)

 

Some would say we already do. The banking sector as a whole is still in debt to us.

 

Perhaps we should send them a letter.

 

'The Banking Sector' isn't a company. Barclays didn't receive one penny of the bank bailout. - They don't owe the British government anything.

 

If Barclays - or any other company - are evading taxes, they should be brought before the courts. If the tax laws are inadequate, Parliament could always change them and if companies don't like the new laws, they could always leave. Taking their jobs and the money they do pay in taxes with them.

[readthefan]

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.

[Cyclone]

To be fair the old bonus structure was linked to short term profitability which encouraged excessive risk taking and wasn't good for anyone except the person who got the bonus.

A more moderate system, which looks at performance over a longer term will encourage more reasonable risk taking and should benefit everyone.

[foxy lady]

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.

 

It is something we do very well in the UK. Bite the hands that feed us. No one seems to notice that Barclay's employs around 50,000 people in the UK and pays them about £4 billion on which they pay NI and income tax. These people then spend their money at UK busineses, creating more jobs and paying masses of VAT.

Barclays pays billions in shareholder dividends which are taxed in the UK, and in most years they pay several £billions in corporation tax. They took no money from UK taxpayers when the times turned rough, yet still we bash them.

 

How many multi-nationals have pulled out of the UK and taken jobs and their tax pounds with them. Didn't Ford once make cars in Dagenham? Rowntrees? Cadbury? etc etc.

 

Fat cats are an easy target for criticism, but we wouldn't half miss 'em if the paid their taxes somewhere else.