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Barclays forced to pay tax through retrospective legislation
28th February 2012
In a landmark development, the government has announced the introduction of retrospective legislation which will force Barclays Bank to pay £0.5 billion in tax that it attempted to avoid.
David Gauke, the Exchequer Secretary to the Treasury, revealed that it is closing two loopholes designed by Barclays which he says are in contradiction with the Banking Code of Practice on Taxation signed up to by all major UK institutions. The two schemes included a claim that corporation tax should not be compulsory when the bank is repurchasing its own IOUs, and a further measure involving the non-taxable income of investment funds supposedly being entitled to tax credits.
Although Barclays informed the government of the self-made arrangements as far back as 2004, it has now been decided that the avoidance methods are not acceptable.
With many changes currently taking place in banking law and the legal industry as a whole, this action marks the start of what is expected to be a particularly busy few months for those working in London lawyer jobs.