THE TAX STRUCTURING UNIT at Barclays is to be cut as part of an ethics push by new chief executive Anthony Jenkins in the wake of the Libor scandal.
The arm, which once accounted for three-quarters of profits in the investment banking operation, will be scaled back significantly as the bank looks to clean up its image, reports the Financial Times.
Rich Ricci, Barclays investment banking chief, will undertake a thorough analysis of the 54 service lines provided by the investment bank with the help of Deloitte, which will eventually lead to cutbacks.
“We have to take a fresh look to see if there are products and services in which … we no longer deem it appropriate to do business, regardless of financial return,” he said.
“Elements of our tax advisory business have generated negative media and political attention.”
The bank’s tax business – “structured capital markets” – drew intense criticism over the last three years for the avoidance schemes it provided to its clients.
Its own tax affairs were also the subject of scrutiny, with the Treasury closing a loophole the bank was using to mitigate its liability, which was attracting controversy along with a “tax equalisation” payment of about £6m made to former chief executive Bob Diamond.
While Barclays remains committed to continuing investment banking activity, Jenkins has placed ethics at the top of the agenda, stating that all future activities will be “screened for reputational impact” as well as profitability.
Earlier this year, the bank was fined £290m for its involvement in manipulating the Libor benchmark, the rate at which banks lend to each other. Chairman Marcus Agius and chief executive Bob Diamond both resigned as a result.
Companies must report on their complex financial structures including offshore accounts and notify HMRC
An examination by the Public Accounts Committee (PAC) has revealed serious concerns relating to HMRC’s plans
The mornings after the night that was the British Accountancy Awards; and Andrew Tyrie's latest thoughts on Making Tax Digital timing
Andrew Tyrie suggests there will not be enough time to implement Making Tax Digital (MTD) by April 2018