Re­vealed: 8p UK tax rate of the for­eign bank ti­tans

Daily Mail - - City & Finance - by James Bur­ton

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.

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