Diamond slams government for breaking taxpayer confidentiality
BARCLAYS chief executive Bob Diamond has slammed the government for hitting the bank with a huge retrospective tax bill earlier this year and for damaging its reputation by “effectively naming” Barclays as the culprit in a tax avoidance scheme.
In a letter to Andrew Tyrie, chair of the Treasury Select Committee of MPs, Diamond complains both that the Treasury applied a change in tax rules retrospectively, hitting the bank’s profits from a £2.5bn debt buyback, and that the government broke its confidence.
“We were therefore surprised to be singled out in the way that occurred, not only through a retroactive change of law but the effective naming of Barclays by the exchequer secretary… accusing the bank of entering into a ‘highly abusive’ scheme,” Diamond writes. “We believe that the confidentiality of taxpayers’ affairs is an important principle of UK tax law.”
Treasury minister David Gauke did not name Barclays directly but referred to a bank that had recently avoided £300m of tax on profits from a debt buyback. Barclays’ name emerged quickly because it was the only British bank to have recently bought back billions of debt for cash.
Diamond says in his letter: “Unnecessary damage was placed on Barclays’ reputation just at a time when the focus should be on rebuilding confidence and accelerating growth, not undermining it.” He also argues that the bank was treated unduly harshly given that it “proactively” disclosed the scheme to HMRC.