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.
Four men have been jailed after HMRC rumbled a £100m tax fraud film scam
The accountancy world has reacted to the news that the UK has voted to leave the EU
Deloitte has made a move into the SME market with Propel, a cloud-based, £2.5m accounting services tool
French police have raided Lucamobile's Paris HQ on suspicion of money laundering and tax fraud