Barclays has been a long term target of those of us concerned with tax justice, as you will find by searching them on this blog. Our aim has always been to create reputational risk for the company because of its use of tax avoidance activity that is of harm to society and, I would argue, to is shareholders as well. So it was good to see this in the Telegraph today:
Bruce Packard, an analyst at Seymour Pierce, said Barclays risks "a fierce customer backlash" if it does not reduce its exposure to offshore tax havens or limit legitimate tax avoidance, and focus instead on service.
In an attempt to restore trust in the industry, Britain's banks "have changed their marketing to appear friendlier", Mr Packard said. But he warned that in Barclays' case the marketing may be "inconsistent with the reality" and that although the bank "has stuck to the letter of the law ... we can't help thinking the brand is being tarnished".
It looks like we're succeeding.
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This is a good reason why MPs should force HMRC to publish their risk assessments of large corporates like Barclays. If it ever happens, and don’t hold your breath, don’t be surprised if some of them are graded low risk when any onlooker would conclude they are high risk. Large corporates have a put a lot of effort into manipulating their “Relationship Inspectors” to get the result they want.
The very large ones like Barclays can get more response out of a friendly phone call with Hartnett than any MP.
Are banks how pay their correct rate of corp tax being undercut competitively by banks like barclays?
Yes
Richard,
Seymour Pierce, hmmmm rings a bell…..
Ahh yes:
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8971165/Seymour-Pierce-hit-with-record-fine.html
Georges
Richard
Seems that Barclays used Cayman very extensively and Jersey a little for their SPVs. How much activity involved Guernsey? I don’t think we feature at all despite your inaccurate suggestion in the now-closed Comments thread.
No, you’re used for reinsurance instead
Another industry
Another tax abuse
Reinsurance is actually miniscule here. You seem to be confusing with Bermuda.
I suspect you mean captive insurance, which is really quite bland. As you know, most captives are owned by PLCs and so are fully audited as part if their groups, and heavily governed by CFC and transferpricing rules.
Not sure tat you willfjnd any skullduggery there,
The industry only exists for tax abuse
That’s it’s sole purpose
So it’s inherently abusive
I have heard that most of the big corporate crime is done in UK because of lax regulation and little oversight, the most recent being the pilfering of $1.5 billion from MF Global segregated customer accounts.
Corporate crime is one of the few remaining areas of expertise in the UK, if we stop these “job creators” it could hurt the tentative recovery.
Richard I completely agree and Stuart seems to be very naive if he believes that an audit of a plc means there is no skullduggery going on.
If these CICs were fully investigated it is most likely that many would found to be managed and controlled from the UK by directors/shadow directors based here and should be paying tax on the full profits. If that happened these businesses would be closed down because as Richard says they only exist for tax abuse.
Why aren’t they investigated? Because it takes alot of hard intrusive work which is beyond the remit of the gentlemanly agreements that now subsist between HMRC and large corporates and if everyone is doing it how abusive can it be? In addition HMRC do not have the volume of qualified staff to do such work, the large corporates have far more staff and advisers and would fight such enquiries tooth and nail, and whats the point if at end the end of the day, after all that work, the boss turns around and throws it all away ala Vodafone. HMRC staff need their morale raising and to have any chance of doing that they need new leadership asap.
My impression is that insurance seriously lacks the level of expertise needed at HMRC to raise serious challenge to the abuse likely to be happening
I’m not blaming those there – they’re just starved of resources
Not true Richard. It exists to enable corporates to self-insure all or part of their corporate risksin a more cost-effective manner. They could use onshore captives if it were possible, but it isn’t. The concept does not exist onshore in any of the G7 countries other than in certain states if the US (Vermont for example), but domestic premium tax is far higher onshore than offshore, and so US corporates tend to use Bermuda instead.
Tax advantages only result if premiums stand up to revenue scrutiny as being arms length transactions.
But you’ve just mentioned tax avoidance as the motive
And without tax it would not be offshore
Can’t you see how hollow your argument is?
Captive insurance is simply tax avoidance: there is nothing else to it. After all, the money never leaves the group so why pay the cost of setting a captive up unless tax savings pay for it? If you can’t see that then I presume a) you’re stupid b) you think we are. And we’re not
Richard
I did not say that tax avoidance was the motive for UK companies. I said that lower insurance premium tax was the driver for US corporations to set up their captives offshore rather than onshore. That is not the same scenario for non-US corporations, and Guernsey is not a major player in the US captive insurance market.
For UK companies, tax benefits are a by-product of the use of offshore captives. The main benefit is the pure cost saving from self-insuring group risks. A prime example is self-insurance of the excess on a policy. On then basis that setting up an onshore captive in the UK is not viable, companies have no option but to use an offshore version. It is simply untrue to say that “without tax (benefits) it would not be offshore”. There simply is not an onshore alternative version.
Yes, the savings pay for it, but that’s the net benefit of the insurance savings. If the insurance benefits don’t stack up, then nobody is going to set up a captive, regardless of whether there might be some incidental tax savings.
I’m certainly not stupid and I don’t think you are either. You just don’t appear to be well-informed about the captive insurance industry and have reached a sweeping and wholly inaccurate conclusion based on your understanding.
Respectfully – that’s complete and utter dissembled nonsense
Captive insurance is a tax rus since without the tax incentive no one would do it – that’s the entire argument in a nutshell
Everything else is the standard nonsense of those who encourage the abuse of the state, democracy, the tax system and the oppression of ordinary people in the interests of the 1%
“In an attempt to restore trust in the industry, Britain’s banks “have changed their marketing to appear friendlier”, Mr Packard said. But he warned that in Barclays’ case the marketing may be “inconsistent with the reality” and that although the bank “has stuck to the letter of the law … we can’t help thinking the brand is being tarnished”
Banks want to restore trust do they? Instead of just coming up with more nonsense in the form of new marketing maybe they should try a few of the following:
– Sack all of the board members who were in charge before the financial crash, and take steps to recover the grotesque financial rewards they received as reward for their fecklessness and incompetence in presiding over the crash.
– If those members (like Goodwin) have already gone, ditto.
Stop overseeing industrial scale tax avoidance and evasion by refusing to use tax havens.
Stop lobbying the government when it tries to inplement even feeble refroms of the banking system.
Anyone believe there’s any chance of any of the above happening?
What is captive insurance?
Does it involve pirates of the suit and ties variety?
No – it’s just insurers supposedly reinsuring their own risks in low tax locations to avoid tax
That’s all there is to it
The rest is just excuses
Sorry to repeat myself, but corporation don’t actually pay the tax they merely collect the tax,
Where does BT get the money to pay tax from???
What about BP?
The question could be why isn’t the tax collector (the bad corporation) collecting enough tax.
That’s an assumption that suggests the corporation does not exist. De jury it does. I think de facto for all practical purposes it does too