Barclays comes out fighting after order to pay back half a billion pounds seen as 'political mugging'

By James Salmon

|

Barclays has come out swinging after it was ordered to pay back half a billion pounds amid accusations of tax-dodging.

In February, Exchequer Secretary to the Treasury David Gauke accused an unnamed lender of using two ‘highly abusive’ and ‘aggressive’ schemes to hide money from the taxman, and announced that the Government was taking the unusual step of using retrospective legislation to close the loopholes.

Although Barclays was not named, it was quickly identified as the bank in question.

HM Revenue & Customs: A taxing issue

Yesterday the Treasury Select Committee demanded a response from the Treasury and HM Revenue & Customs in a letter to Chancellor George Osborne. It is investigating a complaint made by Barclays chief executive Bob Diamond that the bank has been ‘singled out’ and unfairly exposed, breaching strict confidentiality agreements between HMRC and taxpayers.

A source added that Barclays felt it had been the victim of a ‘political mugging’ by the Chancellor.

Diamond argued the lender did not breach any tax rules, and added that other companies used the same schemes to trim their bills.

 

In a letter written earlier this month but published yesterday, he also pointed out Barclays had voluntarily disclosed the schemes to HMRC.

‘We were therefore surprised to be singled out in the way that occurred; not only through a retroactive change of law, but the effective naming of Barclays by the Exchequer Secretary in his statement to Parliament, accusing the bank of entering into a “highly abusive” scheme,’ he said.

Diamond described the retrospective clampdown as ‘completely unwarranted’ and argued that ‘unnecessary  damage’ was caused to his company’s reputation.

An insider said: ‘I think they feel like they’ve been the  victim of a political mugging and that they were used by the Government. They would gladly have paid the money rather than taking reputational hit.’

Last week a report from the Public Accounts Committee estimated tax evasion costs the economy 35bn a year.

HMRC was accused by the same committee last December of striking cosy deals with big businesses such as Vodafone and Goldman Sachs.

Osborne has ordered HMRC to collect an extra 17bn this year from catching out tax cheats.

 

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

well its one sure way to encourage companys to move away from rip off britain,they will have been mugged by the gov and tax authoritys because they mug each and everyone of us .we are well on the road to a banana republic government. as ask for the money they will get from barclays well dont think the british public will benefit,everyone else in the world yes but never the british public..let him who wouldnt dodge some tax if they could cast the first stone.

Click to rate     Rating   1

We need the banks, so get over it and start thinking the glass is half full for a change. - Optomistic Norm, London, 29/5/2012 9:06------ Oh they do. They do. It is only people like Vince Cable that think the banks glass is half empty. He rabbits on, and on, and on about how difficult it is for SMEs to get loans whilst conveniently forgetting that the banks grant far more loans to small business than they reject. Of course Vincent its not your fault as Business Secretary that SMEs find life difficult? Keep on under performing staff who drain your profits and then moan that the banks will not lend to businesses which can`t make a profit. Mr Cable - your glass along with Clegg - is truly less than a quarter full.

Click to rate     Rating   3

I don't think corporations or individuals are required to arrange their financial affairs in order to pay as much tax as possible. The Government make the rules, and if they leave a big loophole well, them's the breaks and none of us on here would turn our noses up at saving a bit of tax. I can just imagine some of you going, "Oh, no, I don't save tax on my ISAs. I always send the money straight to the Revenue."

Click to rate     Rating   3

Pay no tax and you are not entitled to state functions. No police, No Armed Forces, No Transport infrastructure. How do you conduct your business then? Tax is not optional, it is part of society.- jaffa, kent, 29/5/2012 07:55.......................Then why do i have to pay additional council tax then Jaffa?

Click to rate     Rating   9

BARCLAYS is no longer British as the majority owner is the Emir of Qatar....the senior management is American....the retail customers no longer even get a call-centre in Britain....and for savings expect a few pennies as an insult. Barclays should be nationalised like RBS/Nat West and stop trading securitised derivates in America. CEO Bob Diamond...the highest paid bank executive in Britain.....why does the government allow this man into the country?

Click to rate     Rating   6

If this is Barclays, or any other Institution/Persons, excuse for not being above board then you do not derive any quarter! I hope that the Tax Authorities cane you for every back tax penny!

Click to rate     Rating   3

Quote from Jaffa in Kent Pay no tax and you are not entitled to state functions. No police, No Armed Forces, No Transport infrastructure. How do you conduct your business then? Tax is not optional, it is part of society. ---------------------------------------------------------------------------------------- We don't need any of them. POLICE are a joke only fit for issuing tickets. Armed forces. If we mind out own business, we don't need any. Transport, another huge joke. Tax is a RIP OFF. We could all live better without it.

Click to rate     Rating   4

What this country needs is a massive dose of optomism from it's critics. The negative banker bashers should be pleased these corporations are contributing so much to the economy. Without the banks we could not function. This countries financial institutions are among the best in the world at arranging financial matters so that society can trade smoothly on a world-wide basis. Yes, they do try to minimize their corporate taxes, but they still pay millions and millions to the state and to their employees. We need the banks, so get over it and start thinking the glass is half full for a change.

Click to rate     Rating   (0)

So essentialy we the public have been robbed of 27 billion from just two companies and George is looking to recoup just 17 billion as a target from all tax evading companies, what a joke I wonder what the balance sheet woul look like if all due tax was collected. The Government has no money it is our money and all due dtax should be collected and used for everyone's benefit . How much of this tax money not paid just sits in fat. cat company and wealthy individuals accounts contributing. Nothing to economic growth or improvements to health education elderly care etc.Effectively dead money sucking the life out of the country.and it suits the coalition to keep it so as fat cats themselves.

Click to rate     Rating   7

How about the public in general,workers/SLAVES pensioners et al the ones that vote for the shysters fighting back at being ripped off and mugged! why bother to vote 'THEY' are ALL the same but different colours,ALL IN IT TOGETHER,but I'd give a new party a run for it's money even though history tells us NOTHING but the same.

Click to rate     Rating   1

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

Your name and location will appear next to your comment.
You have 1000 characters left.
Libellous and abusive comments are not allowed. Please read our House Rules.
For information about privacy and cookies please read our Privacy Policy.
Terms