HM REVENUE & Customs (HMRC) has stopped Barclays from using two "aggressive" tax avoidance schemes that could have cost the Treasury £500m, reports said.
Barclays, which has signed a "code of practice" on taxation, has faced questions for years about its tax structure and planning, the Financial Times reported.
One scheme tried to avoid corporation tax on the profits arising from a buy-back of its own debt, HMRC said.
The other scheme, which involved authorised investment funds, sought to exploit provisions of regulations to generate the repayment of tax.
David Gauke, the exchequer secretary to the Treasury, said: "The Government is therefore acting today to tackle two aggressive tax avoidance schemes that have been disclosed by a bank to HM Revenue and Customs. By acting immediately, the Government will ensure the payment of over half a billion pounds in tax, protect further billions of tax from being lost and maintain fairness in the tax system."
The government said it had amended corporation tax rules on debt buyback in the 2012 Finance Bill and also passed legislation to stop the exploitation of regulations on authorised investment funds. Both legislative changes were effective from Monday.
People familiar with the case told the FT that Barclays did not agree with the Treasury estimate of a potential £500m loss from the bank's avoidance schemes, saying it was less than £200m.
So why did the Government only make the provisions effective from Monday? Surely this would have been a proper payback to make it retrospective for the years that Barclays has been questioned regarding its structures.
Probably fact they involved bankers and other dignitaries gives the answer and not lowly contractors
Posted by: Bill, 28 Feb 2012 | 11:32
The same principle should be applied retrospectively to all organisations.
Posted by: Kumar Kumarendran, 28 Feb 2012 | 11:57
The banks will NEVER learn! Their greed is hard wired into their organisations.I hope finally someone will go to prison.....if it were a small business (orHarry) they would spend hundreds of thousands to recover £20k
Posted by: red five, 28 Feb 2012 | 13:35
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