So here’s the scoop:
A “whistleblower” says that Barclehs is planning to “dodge taxes.” Maybe it is the reporting style in the International Herald Tribune, or the fact that Her Majesty’s Revenue and Customs representative doesn’t know the difference between tax evasion and tax avoidance (one might explain this away by pointing out that the distinction and usage of the two terms is less clear in the United Kingdom) or, perhaps, we have actually gotten to the point where an allegation of tax planning is enough to fire up the investigative machine.
“We have received papers relating to allegations of tax avoidance in the banking industry which we are studying carefully,” HM Revenue & Customs said.
The Guardian newspaper reported on the weekend that the documents reveal the existence of a scheme codenamed Project Knight, which appeared to be an attempt to obtain tax relief in different countries.
The newspaper said the 2007 plan was created by a team within Barclays Capital, a subsidiary of the bank, to legally avoid tax.
Barclays said that the project was voluntarily and fully disclosed to the tax office.
Lesson #1: In this environment, do not give your legal tax avoidance plans secret sounding codenames like “Project Knight.”
Barclays investigated for alleged tax dodging [The International Herald Tribune]
So, that whole thing about us taking your toxic assets and you just moving on with life? Not so much.
Barclays was warned on Monday that its balance sheet would be subject to forensic Treasury examination if it decided to dump toxic assets on the taxpayer, amid signs that the bank could face a higher-than-expected bill for using the government’s asset insurance scheme.
Barclays executives are studying the terms of the Lloyds deal to insure £260bn of assets as they decide whether to formally apply to join the scheme before a March 31 deadline.
“See, this is a ‘you scratch my back, I scratch yours’ sort of situation here. What we really want here is you lending again to who we want you to lend, and you’ve really not been a team player on this point. We haven’t forgotten when you turned your nose up before when we offered our help. No-siree. Some people were a little… put out. Going to “Middle Eastern investors” instead of the British Government? What’s wrong with you, man?”
Barclays warned on toxic asset dumping [The Financial Times]
You sort of knew it was percolating anyhow over in the UK, but it seems to have come to a boil (ahem).
Barclays announced a top-level review of its bonus structure on Monday, amid a growing political clamour in Britain over rewards paid to bankers in the midst of the credit crunch.
Gordon Brown, British prime minister, said he was “angry” that Royal Bank of Scotland – a part-nationalised bank – was preparing to pay out £1bn ($1.5bn) in bonuses. Other ministers urged bankers to forgo their rewards.
The start of the bank bonus season has provoked a wave of anger towards bankers in Britain. On Monday the former bosses of RBS and HBOS will be grilled by MPs on how they led their institutions to the edge of collapse.
After Dick Fuld and the SEC we find it hard to imagine anything would be more entertaining, but we haven’t seen Questions to the Prime Minister in a while.
Barclays to review bonus policy amid clamour [The Financial Times]
ADRs (NYSE:BCS) are down 32%. We can’t tell, and various “financial journalists” have even thrown up their hands with the “traders could not immediately identify a cause” crap. Aren’t you supposed to say “petro-dollars unwinding their positions” when you have no idea?
Well, we happen to know a better source. You. So who is slipping it to the Barc? Tell us.