Five investment banks paid no corporation tax at all in 2014
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Five of the largest investment banks in the country used tax breaks and offset previous losses against any gains made last year to avoid paying any corporation in 2014, despite booking billions of pounds in profits, according to a new report.
Figures from news agency Reuters have shown that JP Morgan, Bank of America Merrill Lynch, Deutsche Bank, Nomura Holdings and Morgan Stanley paid no corporation tax at all in 2014.
The banks have declined to comment, but their tax returns comply with UK tax regulations.
The report looked at the tax returns from seven banks, including Goldman Sachs and UBS, and found they paid a combined £20 million in corporation tax in 2014, even though they racked up profits of £3.6 billion on revenues of £21 billion.
The seven banks employ 33,000 staff between them in the UK.
The bank filings also show that some of the firms paid no tax because they reported losses in London, while reporting profits in much smaller units in lower tax countries such as Luxembourg.
Tax campaigners and politicians argue that banks should pay their fair share of tax, particularly after having received financial support during the financial crisis.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “Our hideously complex tax code makes it easier for well-paid accountants to run rings around the taxman. The power to make our tax system simpler lies in the hands of politicians, so they must stop grandstanding and actually do something to reform it.”
The report comes as a growing number of US and other international firms are being investigated over their tax affairs by the European Commission.
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