Barclays defers £2.5bn to offset tax

Tax assets up from £2.3bn, due to losses in UK, the US and Spain, some incurred before 2010 Barclays has deferred tax assets of £2.5bn, up from £2.3bn, as a result of losses in the UK, the US and Spain, which will help to reduce its tax bill in the years ahead. According to the bank’s annual report, published after markets shut last night, some £1bn of the tax assets – which the bank can count against tax bills – had been stored up from losses incurred before 2010. The bank, which survived the banking crisis without a direct taxpayer bailout, incurred controversy when it admitted to the Treasury select committee that it paid just £113m of corporation tax in the UK in 2009 – when it made £11.9bn of profits. The bank has never been specific about how its tax bill stayed so low, other than to refer to losses it had incurred previously. In its annual report, the bank highlights “global tax payments” of £6.1bn – £3.1bn of taxes borne by Barclays and £3bn of taxes such as employee income tax. The total corporation tax bill was £1.5bn, but it does not say how much of this was paid in the UK. Instead it said “total tax” paid to the UK exchequer in 2010 was £2.8bn. The exact amount of tax assets that Barclays has in the UK is unclear. UK rules allow the bank to use the losses against future profits indefinitely. Other countries, such as Germany, place restrictions on the time such losses can be carried. The annual report is published a week after Barclays admitted that five of its key bankers had been awarded shares and cash deals of more than £110m. Later this week, bailed-out Royal Bank of Scotland is expected to reveal that more than 300 of its key bankers have an average pay deal of more than £1m. While this might seem high, it is lower than the £2.4m per head average awarded to similar staff at Barclays. The news comes as a report out yesterday said profits by the major banks have doubled during the past year but the groups still face significant challenges going forward. The big five – Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered – made combined pre-tax statutory profits of £22.2bn in 2010, up from £11.3bn in 2009, according to accountants KPMG. The increase was driven by a dramatic drop in impairment charges across all five banks, with these falling by more than £20bn during the 12 months. There was also a marked increase in the margins on their existing mortgage book at some of the banks. Barclays Tax avoidance Corporate governance Banking Jill Treanor guardian.co.uk

Posted by on March 14, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.