The Treasury has blocked an attempt by Barclays Bank to use two complex schemes to avoid paying tax, according to reports.
In a statement issued yesterday, Treasury exchequer secretary David Gauke announced plans to tackle two “aggressive” tax avoidance schemes.
Barclays has not been named officially by the Government but the BBC reports “well placed sources” saying it is the target of the £500m crackdown.
Gauke says: “The Government is fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.
“The Government is therefore acting today to tackle two aggressive tax avoidance schemes that have been disclosed by a bank to HM Revenue and Customs.
“By acting immediately, the Government will ensure the payment of over half a billion pounds in tax, protect further billions of tax from being lost and maintain fairness in the tax system.”
In a statement issued today Barclays says: “This situation arose when Barclays voluntarily disclosed to HMRC in a spirit of full transparency that it had repurchased some of its debt in a tax efficient manner.
“This was based on guidance from professional advisers that the treatment was both legal and compliant with the tax code, and given others had used a similar treatment. Barclays also disclosed its participation in an authorised investment fund which is also legal and compliant with the tax code.
“On the basis of that approach, HMRC has decided that it intends to work with the Government to change the tax laws retrospectively to prevent any company from using such treatment again.
“Barclays respects the decision of HMRC and the Government to adjust the tax laws and will, of course, comply with the modified law once it is in place.”