CALL TO SLASH BARCLAYS CHIEF’S BONUS
BARCLAYS was under pressure last night to cut chief executive Bob Diamond’s bonus after admitting its role in a £500million tax avoidance scheme.
Suspicions about Barclays’ complex tax structures were confirmed after HM Revenue and Customs said it had clamped down on a ‘highly abusive’ example of avoidance. Barclays has now owned up to being the culprit.
David Gauke, Exchequer Secretary to the Treasury, said he suspected ‘the bank is regretting what it has done’, adding: ‘They have not fooled us all. They got caught.’
The scheme meant the public purse was deprived of a sum equal to the pay of 18,700 nurses.
Last night, Lib Dem peer Lord Oakeshott accused Barclays of running a ‘tax avoidance factory’, adding that the undisclosed bonus paid to Mr Diamond, who receives a basic salary of £1.35million, should be targeted.
He said: ‘Shareholders must take action on Bob Diamond’s bonus. He is destroying huge amounts of shareholder value and trashing the brand.
‘A supermarket chief who tarnished its image would not get a bonus. He would be shown the door.’
The controversy surrounds Barclays’ sale of some of its debts on the open market.
These ‘bonds’ then vary in value as they are bought and sold by traders and other institutions.
Barclays waited until its bonds fell in value and bought them back, making a profit that would normally attract corporation tax of 26 per cent. But the Barclays scheme meant it avoided this.
Barclays had vowed not to take part in tax avoidance schemes.
A spokesman for the bank said: ‘This situation arose when Barclays voluntarily disclosed to HMRC in a spirit of full transparency that it repurchased some of its debt in a tax-efficient manner.’