Barclays closes controversial tax avoidance unit

[alp227]

Source: The Guardian

The new chief executive of Barclays is to close the bank's controversial tax avoidance unit in a bid to repair its battered reputation, although he still risks inflaming the row over City pay by paying out up to £2bn in bonuses.

Antony Jenkins, who took over as Barclays boss when Bob Diamond was forced out as a result of the Libor-rigging scandal, will announce on Tuesday that the tax planning part of the structured capital markets (SCM) division – which has been accused of orchestrating tax avoidance on an "industrial scale" and has generated vast profits for the bank – is to be axed.

The tax planning operation is one of several areas that have put been under review by Jenkins to assess if the bank's businesses are ethical and not just profitable. While Barclays will continue to offer straightforward tax planning to customers, it will pledge to no longer devise schemes purely intended for this purpose.

Barclays is also facing calls to restrict bonuses following the £290m Libor rigging fine; a £1bn bill for compensating customers mis-sold payment protection insurance; and a potential multi-million pound fine for mis-selling interest rate swaps to small businesses.

Read more: http://www.guardian.co.uk/business/2013/feb/09/barclays-closes-tax-avoidance-unit

[dballance]

1. Anyone Who Believes They'll Actually Stop Tax Avoidance Planning is a Fool

So they're closing down a unit that is representative of assisting customers in avoiding taxes. It's a nice symbolic, PR moment. If, however, you think they're going to risk losing their high-dollar customers to other institutions by not helping them with tax avoidance schemes you are a naive fool. They will simply weave these services into other products and services they offer. It will become part of "straightforward tax planning" no doubt.

[dipsydoodle]

2. Their customers

are more likely to go to the large auditing firms who don't come under the same controls as banks.

[David__77]

3. Tax avoidance is understood to be legal, "tax evasion" not so...

I have to go back and amend a couple income tax filings where I missed realizing that I could deduct state income tax and pay less than using the EZ form. I will certainly do that and get more money. Avoidance is the minimization of tax within the constraint of the law.