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‘Get a grip’ on tax, McDonnell warns
Five global investment banks paid no corporation tax in 2014
GEORGE OSBORNE has “no serious answer to the serious problem of tax avoidance” shadow chancellor John McDonnell charged yesterday after reports that five global investment banks were exposed for paying no corporation tax in Britain last year despite making billions in profits.
JP Morgan, Bank of America Merrill Lynch, Deutsche Bank, Nomura Holdings and Morgan Stanley got away without paying tax, according to analysis by news agency Reuters.
They exploited tax breaks by reporting losses for their trading offices in the City of London while claiming to have made profits in numerous low-tax countries such as Luxembourg, Reuters reported.
Two other banks — Goldman Sachs and UBS — were found to have paid a combined £20 million in corporation tax in 2014 on £3.6 billion profits, which equates to a minuscule 0.55 per cent total contribution to the Treasury.
Tax expert Richard Murphy told the Star that the banks are “still using losses from 2008 onwards to cancel profits for tax purposes now” in stockpiling losses to offset future bills.
Mr Murphy said: “All banks are very good in shifting their London profits to Ireland, Singapore and the Channel Islands.
“The simple fact is that we need to take steps to enforce new rules on the taxation of banks to declare their profits where they really earn them.
“Without new, better rules to force the banks to disclose their true profits, we’re not going to stop this kind of abuse.”
The Conservatives were the only political group in the whole EU that opposed measures voted for by the EU parliament last week to crack down on corporation tax avoiders, said Mr Murphy.
He added: “Why are the Tories the only ones in Europe opposing stopping this financial abuse? They have not answered.”
Mr McDonnell laid into the Chancellor.
He pointed out that at least 153 HM Revenue & Customs offices are set to close down and this gives the impression that he doesn’t want to offer a solution.
“If the Chancellor wants to demonstrate that he’s not in hock to the banks and City financiers then he needs to get a grip and make sure they pay their taxes appropriately,” Mr McDonnell blasted.
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