Tax lesson for the Daily Telegraph
Posted by Christie Malry on January 2, 2012 at 9:54 am
Earlier this year, chief executive Bob Diamond was forced to reveal that the bank operated nearly 300 subsidiaries in tax havens and had paid just £113m of corporation tax in the UK in 2009 – a year in which it handed out £3.4bn in bonuses.
Well, duh. You may as well compare the amount of tax paid to the amount spent on cut flowers or heating. Bonuses are a business expense. Companies deduct bonuses in arriving at their taxable profit. Barclays could, if it wished, pay all of its profits out in bonuses, reducing its taxable profit to nil.
By comparison, corporation tax is the charge payable in the UK on the taxable profits earned in the UK.
Really, only a total moron would even attempt to compare these two figures. Just what is Philip Aldrick trying to achieve?
I don't agree it that it is moronic to compare these two figures. Value Added Statements are useful precisely because they show how the value created by a firm is distributed between the stakeholders, ie employees, government, and financiers..
You have a point - but are of course diverting attention away from the real point, which is are bank bonuses justified in relation to the level of value they add to the company concerned. Given Barclays results and its share price even a dyed in the wool capitalist would have trouble arguing that free markets were working efficiently in this regard - just compare bank bonuses paid with those paid before 2007.
Time to allow the real investors i.e. individuals with pensions/savings invested a say in these matters, rather than the so-called investment managers I think.