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Darling in tax row as he fails to hit Barclays
25 Mar 2009
The government came under fire today after it indicated it would not be taking action against Barclays over its so-called "tax-avoidance factory" in Canary Wharf.
Barclays ran into a storm of protest last week as it emerged that it had a team of more than 100 highly-paid executives creating complex tax-avoidance structures to save billions of pounds of tax for itself and clients.
The revelations were particularly incendiary as chief executive John Varley is negotiating to take advantage of a taxpayer-backed insurance scheme for billions of pounds of its toxic assets.
But today it emerged that chancellor Alistair Darling will not be taking tougher measures against tax-avoiding banks seeking taxpayer support than those who are not.
Darling will publish a code of practice on tax avoidance at about the time of next month's Budget, urging all banks to apply the spirit of the law as well as following it to the letter.
Liberal Democrat spokesman Vince Cable, who kicked off the Barclays controversy after receiving leaked information from a whistleblower, has described the code as "limp-wristed". The bank, he said, should not be allowed to take part in any taxpayer-funded scheme until its bankers "stop their systematic attempts to avoid paying UK tax".
The Treasury said in a statement: "The asset protection scheme and code of practice on taxation for the banking sector are separate issues."
Reader views (5)
The delinquent banks should have been aloowed to fail; to have propped them up with taxpayers' money made no economic or moral sense. Ordinary working men and women are now subsidising the avaricious life-style of arrogant and incompetent city traders who represent so much of what is bad in our society.
- Richard Kennard, Welling, 21/04/2009 16:40
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The rich make the rules to stay rich, don't people realise that. Its the middle class that will always suffer especially as we all start to head towards poverty
- Dc, London, 26/03/2009 10:53
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It's ironic that if Barclays hadn't kept back this money, then lent it out on a multiple to toxic debtors, they wouldn't need gov't help now, making us the loser twice.
- Mdj E10, london uk, 25/03/2009 15:23
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Dave Davies - 100% spot on.
- Dave, herts, 25/03/2009 12:19
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Why "hit" Barclays because they know the rules and loopholes of the global tax system?
If it was a foreign firm, Cable wouldn't bat an eye-lid. Just sounds like a manufactured fuss of bank related spite.
The real issue is that the tax system needs reforming. A flat tax system where no-one escapes with any offsets is the answer. However, that doesnt allow social engineering and manipulation, does it?
- Dave Davies, Basingstoke, Hants, 25/03/2009 10:46
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