Revealed: 8p UK tax rate of the foreign bank titans
FOREIGN investment banks that have been doom-mongering about Brexit paid no corporation tax on billions of pounds in profit made in the City, the Mail can reveal.
Analysis shows that, on average, nine of the world’s biggest lenders coughed up to the exchequer just 8p for every pound of profit.
US firms Citibank and Bank of America Merrill lynch appear to have paid no corporation tax at all, according to documents. Campaigners were furious, saying the figures showed that international financiers were still not paying their fair share.
The nine made £11.2bn of UK profit in 2014 and 2015, the two years in which they have had to disclose tax payments under EU rules. However, they paid only £890m of tax, or 8pc of their profit.
Corporation tax in Britain is 20pc and from the start of last year banks were also charged 8pc on top.
Big banks afraid they will lose access to the Continent after Brexit have been lobbying intensively. A succession of chief executives have warned they will shift thousands of jobs abroad unless the Government takes steps to protect them – with the implied threat the public purse will suffer as a result. But the ultra-low taxes paid by many lenders give succour to critics who say their demands should be simply ignored.
labour MP John Mann, a member of the Treasury Select Committee, said: ‘It is outrageous that these banks are still not paying their fair share of tax. The public will rightly find this shock- ing and ask, “When will they stop taking us for a ride?” ’
The Mail looked at the largest foreign lenders that made a profit in 2014 and 2015.
Firms that made losses were not included as corporation tax is paid only on profits earned.
The figures do not cover every single part of a bank’s operation in the UK – just earnings from those parts the EU orders them to disclose.
Banks argue they prop up Government spending through employees’ income taxes, VAT payments and other fees not shown in the EU statistics.
However, our analysis reveals a wide range of corporation tax payments – and they show that Wall Street giants are the worst offenders. JP Morgan – one of the most vocal opponents of Brexit – made £2.9bn in profit but paid just £131.9m in taxes. In the runup to the EU referendum, boss Jamie Dimon threatened that 4,000 of his 16,000 UK staff could lose their jobs if the vote didn’t go the way he wanted it to.
Meanwhile, Goldman Sachs made £3.9bn of profit and paid £229.2m in tax.
Citibank, which paid no tax on profits of £478.7m, has come up with 25 criteria to decide where it will move some of its 9,000 staff and is encouraging European cities to outbid each other for a slice of the action.
In contrast, Bank of America – another zero-rate taxpayer, with profits of £1.1bn – has kicked off a search for a london office to house its 1,800 City employees.
None of the banks approached by the Mail wanted to comment.