We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedGovernance

Government shuts down Barclays' £500 million tax avoidance schemes

Treasury minister says retrospective legislation will be used in strong cases

Article comments

The government closed down two tax avoidance schemes worth £500 million, Exchequer secretary to the Treasury David Gauke said on Monday, after they were said to be disclosed by Barclays Bank,

The closing of the schemes would be worth an immediate £500 million to the Exchequer and would "protect further billions of tax", Gauke said.

The bank, which has not been officially named, is understood to be Barclays. Under HM Revenue & Customs' Disclosure of Tax Avoidance Schemes (DOTAS) regulations, the bank informed HMRC of the two schemes.

The first scheme involved banks buying back their issued debt that was trading at a discount in the market and using corporation tax relief to avoid paying tax on the profits, which had been addressed in the Finance Act 2010 and subsequent ministerial statements.

"Despite these clear statements, the bank has now entered into a scheme using contrived arrangements that once again seeks to ensure that the profit on a buyback of such debt is not subject to corporation tax and therefore that a substantial amount of tax, of around £300 million pounds, is avoided," Gauke said.

Gauke also criticised the bank, which he did not name, for acting against its code of practice.

"The bank has adopted the code of practice which contains a commitment not to engage in tax avoidance. The government is clear that this not a transaction that a bank that has adopted the code should be undertaking," he said.

The second scheme exploited provisions of the Authorised Investment Fund (AIF) regulations to generate the repayment of tax that has never been paid.

Gauke added that the government would introduce retrospective legislation "where we believe there is a potentially strong case".

Photo credit: Reuters


Recommended Articles


Government shuts down Barclays' £500 million tax avoidance schemes

What’s going to kill your company?

What’s going to kill your company?

The role of the CFO and the board in strategic risk governancemore ..

Tesco’s new finance chief starts two months early amid accounting crisis

Marks and Spencer releases Alan Stewart early by to help deal with £250 million hole in Tesco’s accountsmore ..

Microsoft removes Bing image widget after Getty lawsuit

The company is being sued by Getty Images for copyright infringementmore ..

Apple loses bid for sales ban in Samsung patent case

Apple failed to show that it suffered enough harm as a result of Samsung's infringementmore ..

What makes a good board report?

Examining how CFOs can improve the way they report back to the boardmore ..

Examining the issue of corporate litigation funding

Litigation funding is a very useful tool for CFOs but not a panacea for all legal mattersmore ..

Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

In Depth
Can finance rise to the challenge of major transformation?

Can finance rise to the challenge of major transformation?

Outdated finance processes, systems and competencies leave too many questions unanswered more ..

In Depth
Interim CFO or consultant? The pros and cons

Interim CFO or consultant? The pros and cons

Ed Harding offers an insight into the life of an interim CFO and the advantages in driving transformation more ..


* *