BARCLAYS’ AUDITOR, PwC, did not advise the bank on two schemes that attempted to avoid £500m and have been shut down by the the Treasury, a source familiar with the bank said.
The source said the bank used another unnamed advisor for the schemes, which tried to avoid tax on profits from a debt buyback and exploit regulations to generate a repayment of tax.
PwC signed off Barclays’ 2011 financial results, which were published on 10 February, and included transactions from the tax avoidance schemes. Barclays disclosed the tax avoidance schemes to HM Revenue and Customs.
Accountancy Age understands although Barclays did not make a specific provision in its annual results to cover the risk that the two tax avoidance schemes would be closed by the taxman, the risk was noted and cash was set aside as part of a provision for various business risks.
PwC declined to comment, citing client confidentiality.
The Treasury said on Monday that closing the two schemes would bring in £500m from a bank, later revealed to be Barclays, and would stop billions of pounds in tax being lost in the future.
In a highly unusual move the Treasury introduced retrospective legislation to end “aggressive” tax avoidance schemes involving debt buybacks.
Heather Self, a director in the tax practice at law firm McGrigors, said: “It is very rare for arrangements already in place to be stopped by retrospective changes to the law.
“This shows that the government is serious about clamping down on avoidance, and makes it even more likely that formal consultation on a GAAR (General Anti-Avoidance Rule) will be announced at the Budget in March.”
Freelancers and micro-businesses still need more information about the government’s plans to make tax digital
New dividend tax is an attack on small business owners and is acting against the best interests of the UK economy, warns Top 50 accountants, Bishop Fleming
The Treasury is consulting on how businesses remunerate their staff to assess whether companies are artificially using benefits in kind to avoid tax
HMRC is consulting on proposals to clarify the tax treatments of general and limited partnerships