Mucho news about Barclays only paid £113m in UK Corporation tax in 2009, versus £4.6bn pre tax profits. They’re on the streets again…
Well before you don your pac-a-mac and leg it to your nearest branch to object that Barclays aren’t living up to their financial obligations:
- They legitimately used a form of rollover relief, available to any business, to offset losses in a prior year against profits in a subsequent year. This is a basic and fundamental right in any sane tax system, otherwise you would pay £0 Corporation tax on your loss and then a huge amount the following year – or should you get a rebate in the year of loss? Think about it…
- Barclays earns 60% of it’s profits outside the UK. It does not pay UK tax on those earnings. Again, this is not a loophole or a tactic, it is tax law (understand the difference between avoidance and evasion).
- If you object to Barclays using tax law to it’s own personal ends, then perhaps you would be good enough to request your personal tax code be amended so you pay tax on the first £6,475 that you don’t pay tax on at the moment.You tax avoider you.
- Taking worldwide earnings into account, it paid total tax at a rate equivalent to 23% in 2009. Nearly a quarter of it’s profits were paid over in the form of Corporation taxes to various tax regimes. Hardly a tax evader then.
- So perhaps they cleverly exploit the system to pay lower taxes in other regimes than they would in the UK. Well, again, this is not illegal. The rate of UK Corporation tax is 28%, so you could argue there has been some saving (if it is intentional). I for one, am glad that our major banks understand the tax system to retain earnings rather than give them over to tax authorities. It implies they are competent in some regard. Who would you rather look after your money (or do all the objectors just keep all their cash under their mattresses)?
- You might argue that the tax system is therefore broken in some way. Well, here, you might have a point. So perhaps camping out in the lobby of Barclays is kind of, like, you know, a bit pointless…
- Higher retained earnings generally improves share prices. Most reasonable pension companies invested in the banks at their low point and are now reaping the rewards. Because of Barclays tax planning department, your pension could actually be worth more. Unless the objectors don’t have pensions…
- So if you had any spare cash perhaps you should have invested in Bank shares, knowing that this would for sure either be a temporary blip (good) or the end of capitalism (in which case, losing some money on a few shares would be the last of your problems). Perhaps the objectors are just the ones that ‘knew this would happen’ but didn’t act?.. I, for one, used the profits to pay for a new dishwasher.
- Barclays received no direct bail-out by the Government during the whole banking trouble. £0. It owes you, the tax payer, nothing. Zero. Not a bean.
- Incidentally, regarding Bankers bonuses – most of these are subject to higher rate personal tax (40%) in the UK. So 40% of anything that is actually declared as a bonus is paid directly back over to the tax man. 40%. Think about that.
If you can read all of these facts, understand them, and still feel the need to wrench the little pens from their tethers in Barclays and run screeming towards one of the tellers in disgust, I am sorry to have to inform you that you are, in fact, a moron. Get off your high horse. Go and be productive. Stop reading newspapers. You do not have the necessary intelligence to avoid being easily enraged.
Go in peace.