Top MP hits out at Barclays tax dodge claims

Tim Wallace
Follow Tim
BARCLAYS’ evidence to the Treasury Select Committee of MPs on tax avoidance measures directly contradicts that given by the chancellor, the committee’s influential chairman Andrew Tyrie declared today, demanding an explanation from the bank.

HM Revenue and Customs retrospectively clamped down on the bank in February after it reduced its tax bill by roughly £300m in a debt buy-back scheme.

Barclays’ then-chief executive Bob Diamond said the bank understood HMRC was familiar with such actions, and so was shocked when the authorities acted against the bank when it voluntarily disclosed the details the HMRC.

But George Osborne told the Committee this was the first time they had seen such a scheme, and so were within their rights to shut it down retrospectively.

As a result of this apparent contradiction, Andrew Tyrie said “If Barclays thinks the chancellor is mistaken, it should explain why.”

When City A.M. questioned the bank it stood by Bob Diamond’s explanation of events.

However, Tyrie did not give the government the all clear either, blaming the tax system for the row.

“There can be little doubt that those opportunities for avoidance – the unintended consequences – exist because the law is so complex,” he said today. “There is, therefore, something that might be done about it: simplify the tax system.”

Meanwhile Barclays announced the appointment of Curt Hess as the boss of its retail and business banking operations in Europe.

It is the first appointment by new chief executive Antony Jenkins, who previously headed up the bank’s whole retail arm, as well as standing in in a caretaker role in Europe.

However Barclays has also been forced to reveal the names of two staff who lost their jobs over the Libor scandal.

The bank had to formally notify the US Financial Industry Regulatory Authority that executive Ritankar Pal was “discharged” on 30 July because he failed “to properly supervise individuals on his team.”

And New York-based derivatives trader Dong Kun Lee was also ousted for allegedly engaging in “communications involving inappropriate requests relating to Libor.”