Citigroup and Credit Suisse paid no tax in the UK in 2014
Citigroup and Credit Suisse disclosed that their main UK subsidiaries paid no tax in 2014.
The news comes following reports that other large investment banks with UK operations also did not pay tax that year.
According to Reuters, the other five months include: JP Morgan Chase & Co., Nomura Holdings Inc, Deutsche Bank AG, Bank of America Merrill Lynch and Morgan Stanley.
It is important to note that there isn’t any evidence to suggest that the banks broke tax rules.
In 2014 a total of 10 banking groups reported $6.5 billion in profit on $40 billion in fees, but only paid $205 million in corporate income tax.
The reports have prompted the Labour party to put pressure on the UK government to reverse a tax change it made for banks last year.
John McDonnell MP, the opposition Labour party’s shadow finance minister, said: ”These are damning findings that make a real mockery of the government’s approach to taxation of the financial sector,”
A spokesman for the finance ministry said: ”The government believes it is crucial that the banks make a fair contribution to restoring stability to the public finances and has taken important steps to ensure they do this,”
After banks threatened to move out of London in July the UK Chancellor George Osborne said that he would reduce a levy banks must pay as a percentage of their assets by half.
He also increased the tax rate banks must pay to 8 percent above the standard rate. However, tax experts have said that corporation tax is easier for banks to avoid than the levy on assets.
McDonnell was quoted by Reuters as saying:
“This report should be setting off alarm bells at the Treasury and he should be reversing his decision on the bank levy immediately,”