Barclays paid £113m tax as bonus pool was £1.5bn


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Barclays was last night accused of living in a "parallel universe" after it emerged that the bank had paid £113 million in corporation tax to the Government on global profits of more than £5 billion.

The tax compares to the £1.5bn it paid in cash bonuses to staff, and a further £1.2bn of longer-term awards.

The standard rate of corporation tax on profits generated in the UK is 28 per cent. Barclays said last night that much of its profit was generated abroad and not subject to UK taxation. The bank's annual report shows that about half its 2009 profit was generated in the UK, suggesting it has paid corporation tax in this country at a rate of 4.5 per cent.

The disclosure came in a written submission to the Treasury Select Committee from Bob Diamond, Barclays' chief executive.

Barclays was not bailed out directly by the tax-payer in the 2008-09 banking crisis, but the Government's announcement of an "asset protection scheme" – an insurance policy for banks' toxic debts – helped its share price to recover from lows of 51p. Yesterday they were trading at around 325p.

Many banking analysts believe its profits have been increased sizeably by an implicit guarantee from UK taxpayers that it would never be allowed to go under.

Giving evidence to the committee last month Mr Diamond was questioned by the Labour MP Chuka Umunna on the amount of tax the bank had paid in the UK during 2009. Mr Diamond told the committee the bank paid £2bn in tax to the British exchequer in 2009. When pressed on the percentage of that sum not attributable to payroll tax ( paid on behalf of employees in income tax and NI contributions), he was unable to provide figures. This week he confirmed that of the £2bn paid, only £113m was corporation tax.

Last night Mr Umunna said: "Given that Barclays has benefitted from both an implicit taxpayer guarantee and the measures taken to save the banking system in 2008, this raises serious questions as to whether the Government is ensuring that banks like Barclays are paying a fair contribution to the deficit they helped create."

Max Lawson, of the Robin Hood Tax Campaign, said: "This is proof that banks live in a parallel universe to the rest of us – paying billions in bonuses and unhampered by the inconvenience of paying tax. "

Barclays said it complied with all taxation laws in the UK "both in the spirit and the letter".

"In 2010 the Group paid over £2.8bn in taxes in the UK and £6.1bn globally... The corporate tax affairs of an organisation with the global footprint of Barclays are complex and not reducible to simplistic comparisons; any link between Barclays Group profits and the amount of tax paid to the UK Government is inappropriate – there is no direct correlation."