First News
Volume:7, Number:25
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Business & Finance 2

Foreign Banks in Britain Pay Fraction of Tax Rate

Some of the biggest foreign investment and commercial banks operating in Britain paid an average tax rate of just 6 percent on the profits they made in the country last year

That is less than a third of Britain’s corporate rate of 20 percent. There is however nothing illegal about how they managed to reduce their taxes, and includes using losses built up during the financial crisis to offset current bills. Seven of the biggest international banks operating in London, Europe’s main investment banking center, have published profit and tax data ahead of a year, end deadline stipulated by EU law. Five of them, all US banks, reported a profit, a combined USD7.5 billion, and paid corporation tax, or corporate income tax, of USD452 million. The British Bankers’ Association (BBA) said the data did not reflect the sector’s full contribution and that, including other taxes and payments, foreign banks contributed about USD20 billion to the UK treasury last year.

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