Barclays Tax Avoidance Division Generated £1bn a Year – Salz Review

Barclays generated revenue of more than £1bn a year between 2007 and 2010 from its controversial tax avoidance division, data published in the Salz review shows.

The review – named after lawyer Anthony Salz – also sheds light on the amount of tax paid by Barclays in 2012 when it made £7bn in top-line profits but paid just £82m in corporation tax to the exchequer. Pre-tax profits were £246m due to an accounting standard relating to how it values its own debt.

The review also shows the revenue being generated from payment protection insurance in which the bank had a 15% market-leading share in 2005. Sales of this discredited insurance was bringing in revenues of £400m a year and banks across the UK have now taken provisions of more than £12bn in mis-selling claims.

The data provided on the structured capital markets (SCM) division, which embarked on large scale tax avoidance schemes for clients, showed that in the 11 years to 2011 it generated revenue of more than £9.5bn.

Antony Jenkins, the new chief executive of Barclays, has insisted that this division is now being shut down – although the 100 staff have largely been redeployed around the group rather than made redundant, the Salz review found.

The review warned that SCM operated in an "inherently risky business dependent on the interpretation of the relevant tax legislation". Barclays had tended to negotiate an annual settlement of its tax liabilities with HM Revenue & Customs, the Salz review said, but this had become more difficult after 2006 when the tax authorities adopted a different approach.

The bank, which has faced fierce criticism for the amount of corporation tax paid in the UK in the past, paid £147m of corporation tax in 2010 and £296m in 2011. Barclays has previously admitted it paid just £113m in corporation tax in 2009.

Powered by article was written by Jill Treanor, for on Wednesday 3rd April 2013 14.59 Europe/London © Guardian News and Media Limited 2010


image: © Dick Johnson

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