Many British politicians and tax campaigners are angry after it was revealed that some of the largest and most successful investment banks in London paid little or no corporate taxes in 2014. It was discovered that seven major banks of the city paid a combined amount that equaled just a little more than $31 million. These seven banks employ a total of nearly 33,000 people, and they generated more than $5.3 billion in profits last year.
The five banks of JPMorgan, Bank of America & Merrill Lynch, Deutsche Bank, Nomura and Morgan Stanley revealed that their branches in the United Kingdom paid no corporate taxes whatsoever. Meanwhile, the British branch of Goldman Sachs paid just $26.6 million in corporate taxes, and UBS paid a little more than $13 million.
Labor Parliament Member John Mann stated, “The tax receipts from these large financial institutions show what a charade their claim to pay their fair share has become. They rely on the taxpayer to underwrite their risk, yet they pay a minimal return back to the exchequer.”
Director of the ActionAid Campaign Barry Johnston added, “The disclosure that UK banks are paying tiny amounts of tax will fuel public anger at a tax system perceived as being hugely unfair. These shocking revelations lay bare the huge flaws in the global tax system which allow multinationals to slash their tax bills by shifting numbers around on a spreadsheet.”
Banks in the United Kingdom have been enjoying extremely low tax bills since the enormous losses that occurred during the global financial crisis of 2008. These losses established tremendous amounts of tax credits, which banks have been using to essentially eliminate any taxes that are levied against them. This has occurred even as banks have once again become heavily profitable.
According to Chancellor George Osborne, many banks might not be paying any taxes for the next 15 to 20 years. Many public officials and lawmakers have called this totally unacceptable. Some of the banks were able to avoid taxes by reporting losses in London while simultaneously reporting heavy profits in smaller affiliates with lower tax rates. Needless to say, the banks in Great Britain are fully working the system to their tremendous advantage.