Post date: Feb 28, 2012 1:5:52 PM
Barclays Plc says it is the bank at the centre of a clampdown by Britain on two tax avoidance schemes that the government said would close loopholes and raise more than 500 million pounds in tax.
UK-TAX CLAMPDOWN - It's a massive issue across Europe, and now the UK is clamping down on tax avoidance by banks.
Barclays is at the centre of a crackdown on two tax avoidance schemes.
The government wants to close loopholes and raise more than 500 million pounds in tax from banks.Barclays could be liable for around 120 million pounds of that.
It says it was honest with the tax office about its plan to buy back its own bonds, claiming other banks have made hefty profits doing the same thing in the past.
The banks aren't breaking the law, but the Treasury says the schemes used are "highly abusive".
And UK banks are under a code of conduct which states they should not engage in tax avoidance.
Angus Campbell is from London Capital Group.
HEAD OF SALE, LONDON CAPITAL GROUP, ANGUS CAMPBELL SAYING:
"It's only a natural thing for the HMRC to try and get as much tax as they possibly can. But it shouldn't in the grand scheme of things affect the banking system at all."
Barclays shares were down 0.8 percent in early trade, under performing a slightly higher European bank index.
But more damaging than the financial hit could be the damage to its reputation.
Barclays has been vocal in recent months about taking responsibility for past mistakes, and improving the image of UK banks.
Ciara Sutton, Reuters