Seven of the biggest investment banks operating in London paid little or no tax in Britain last year, despite reporting billions of dollars in profits.
It is according to analysis of corporate filings carried out by the Reuters news agency.
In recent months, the seven investment and corporate banks operating in London reported figures showing they paid a combined $31 million in corporation tax in 2014. Between them, the banks generated revenues of $31 billion in the UK, profits of $5.3 billion and employed 33,000 staff.
Five of the banks – JP Morgan, Bank of America Merrill Lynch, Deutsche Bank AG, Nomura Holding and Morgan Stanley – said their main UK arms paid no corporation tax, as Britaln calls corporate income tax.
The filings show that the seven banks, which also include Goldman Sachs and UBS AG, used tax breaks and tax losses generated during the banking crisis to reduce their tax bills.
Spokespeople for the banks all declined to comment, although their filings noted that they followed all tax rules and noted that tax payments can be volatile and may reflect profits generated in earlier years.
Banking industry groups say that in addition to paying corporation tax, the banks benefit the exchequer by generating significant amounts of income tax.
The UK tax authority, Her Majesty’s Revenue and Customs (HMRC) and the finance ministry declined to comment on the banks’ payments, citing taxpayer confidentiality. HMRC said it applied the tax rules set by government without discretion.