US bank close to settling back taxes that were avoided through the use of an offshore trust
US BANK JPMorgan is close to agreeing a £500m settlement with the UK government to pay back taxes that were avoided through the use of an offshore trust for employee bonus payments, the Financial Times reports.
The bank is winding up the trust and has asked more than 2,000 current and former employees to contribute to the settlement.
Trust schemes allow companies and their employees to avoid paying employer’s national insurance contributions and income taxes, the paper said.
JPMorgan’s Jersey trust had previously operated with the full knowledge and authorisation of UK tax authorities. Such schemes are being closed following the introduction of legislation last year.
According to the FT, senior executives involved in the scheme in recent years estimated the amount held in the trust at between £2bn and £9bn.
JPMorgan declined to comment on specifics but said: “Our employee trust has always been transparent … and its independent trustee has consistently paid taxes in accordance with UK tax law. In addition to taxes paid by the trust, JPMorgan has paid, on average, more than £1bn of [UK] corporation and payroll taxes … annually over the past decade.”