Darling Announces Tax Code Of Conduct For UK Banks

by Jason Gorringe, Tax-News.com, London

19 March 2009

UK Chancellor of the Exchequer Alistair Darling has announced that banks will be encouraged by the government to sign up to a new voluntary code stipulating minimum standards of tax compliance.

In a statement to the House of Commons on March 16, Darling said that banks should be expected to comply with the "spirit of the law."

"We expect banks to fully comply with their tax obligations," remarked Darling.

"So I can tell the House that I have asked HM Revenue and Customs to publish shortly a draft code of practice on taxation for the banking sector – so that banks will comply not just with the letter but the spirit of the law," he announced.

It is thought that the code will be drawn up in time for inclusion in the 2009 budget speech, to be delivered by Darling on April 22.

The government's announcement follows reports published by the Guardian newspaper that the Royal Bank of Scotland and Barclays Bank participated in large scale tax avoidance schemes using a series of complex transactions and financial instruments.

Earlier this month, Darling told the Commons that RBS had agreed to forgo its right to offset current losses against any future profits in return for participating in the UK government's Asset Protection Scheme, which will see the Treasury effectively taking ownership of the bank's 'toxic' debt.

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