Saturday, February 19, 2011

Barclays: Tax is for the little people

Barclays beautiful people

Barclays beautiful people © fintag

News comments:
"We don't pay taxes. Only the little people pay taxes." Leona Helmsley, 1983.

I was fortunate to have supper with the senior partner of international tax at one of the top 4 accountancy firms. He (difficult to tell under the dress) told me how only idiots paid stamp duty on UK property, that most commercial property in Europe was funded by money launderers and Ireland was the gateway to most tax planning.

So we came onto Barclays and how they were one of the better banks at keeping their tax liabilities low. It was concluded they had ultra smart people working there; they used ultra smart tax advisers like him (but not him); utilized lawyers who never slept; and continually lobbied government that if they were given grief by HMRC or the IRS they would move to Asia along with HSBC.

Bobby Geezer, all charm with those ruthless teeth, used Tony Blair like spin to push aside any concerns that Barclays wasn't playing by the rules at a recent grilling by a Treasury committee. He runs Barclays with this mission statement:

...Keep taxes down and bonuses and dividends will make us all very rich...

Most banks have this sort of motto. The employees and shareholders of banks are always delighted at the way cash is kept away from the tax man and given to them first. My tax accountant companion was also a very rich man who told me his tax rate was zero-ten. The government are muppets to these x-men.

Of course, the current media headlines like this have caused a stir:

How the Guardian was gagged from revealing Barclays tax secrets (guardian)

Bobby Geezer spills the beans (telegraph - pdf)

Barclays pays just 1% of £11.4bn profit in corporation tax to UK (daily mirror)

BBC outrage that Barclays employees spend more on taxis (bbc)

Bankers have got back to their old ways because like old dogs they cannot be taught new tricks. Although the likes of Barclays pay a lot of tax to the UK's HMRC, they could pay so much more but then the employees and shareholders would suffer and we don't want that do we? If Barclays left the UK the damage would be huge and the UK government needs all the companies with jobs to stay here.

It is a difficult balancing act but the devil is in the detail. Barclays offset a chunk of its PTP from previous years losses so its not as bad as all that. All companies can do this. Imagine if the UK abandoned this rule? Consequences would be dire.

Remember I still love bankers because I was one once and they contribute a lot to our society [Editor: You are fired] (fintag).

Today's shorts:
Barclays tax haven ISA deposit accounts (barclays)

Another Groovy Ponzi scheme in the USA (hedgeweek)

Today's longs:
Winter's new hedge fund to be called Snow Patrol Capital (finalternatives)

Barclays to get tax rebate in 2011.