2 more foreign banks paid no UK tax
Print Edition
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 in the past fortnight 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 US$40 billion in fees in Britain in 2014, reported US$6.5 billion in profit and employed almost 50,000 people. But they contributed just US$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.
The other five banks, as reported by Reuters last month, are JP Morgan Chase & Co, Nomura Holdings Inc, Deutsche Bank AG, Bank of America Merrill Lynch and Morgan Stanley. All declined to comment. There is no evidence that they broke any tax rules.
Most companies engage in tax planning to manage their bills, and banking lobby groups say corporate income tax is just one of many taxes the investment banks pay — Britain benefits from income taxes on bankers’ bonuses.
“The government believes it is crucial that the banks make a fair contribution to restoring stability to the public finances and has taken important steps to ensure they do this,” a spokesman for the finance ministry said. The tax authority said it ensures that all businesses pay tax due under British law, but declined to comment on the banks.
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