Economy
Barclays accused of promoting tax havens
A report by ActionAid has suggested Barclays is increasing the number of tax havens it is promoting, despite the bank saying it was changing after a series of scandals and allegations.
In 2012, Barclays was fined £276m for its part in the Libor scandal followed by a £50m fine for acting ‘reckless’ over a deal with Qatari investors in 2008.
The bank is now facing a probe into the foreign exchange scandal.
According to the report, Barclays is now the largest retail bank in Africa and the ActionAid argues this puts the bank in a position of responsibility with the regard to the way it operates and the role it can play in the country’s economic future.
Barclay’s Africa Group Strategy 2013 states that it wants to become the ‘go-to’ bank in Africa. The strategy adds that it is also committed to benefiting the lives of their customers and local communities.
However, ActionAid said its research shows the bank’s commitment to delivering responsible investment “is questionable at best”. Despite announcing in early 2013 that Barclays was to close its controversial tax planning unit, in September 2013, its offshore corporate brochure introduced the African tax haven of Mauritius for the first time, alongside established jurisdictions such as Jersey, Cyprus and Switzerland.
ActionAid tax justice adviser Toby Quantrill commented, “Every year developing countries lose billions of pounds of vitally needed revenue because of tax avoidance by big companies using tax havens.
“When companies avoid tax, they drain billions of pounds of revenues out of developing countries that could be used to help build schools and hospital and lift people out of poverty.”
A poll conducted by the campaign group showed that 57% of Barclays customers say it is unacceptable for the bank to provide services that can help large companies reduce their tax bill in developing countries. Quantrill said this sent a “stark message to the bank” that customers do not agree with its ethics.
In contrast, the report notes that other banks are taking positive action and that overall UK banks are moving in the right direction. Increasing public concerns about tax avoidance has led to Lloyds, RBS and HSBC making public statements about closing their subsidiaries in tax havens.
A Barclays spokesperson told the Guardian that the bank “[shared] ActionAid’s objective that companies and individuals pay the right amount of tax in each country where they do business.”
However, they added, “While we appreciate ActionAid’s concern in this matter, we do not believe that their interpretation of some of the facts is correct. Barclays does not encourage businesses to set up in any particular jurisdiction and we also ensure that tax planning undertaken by Barclays, including that undertaken for clients, complies with our published Tax Principles.
“As such, tax planning must support genuine commercial activity and be of a type that the tax authorities would expect, amongst other requirements. This applies equally to activity in Mauritius as it does to the remainder of Barclays’ operations.”
Further reading:
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