Lloyds tax deals equal false accounting - whistleblower
"A former employee of Lloyds Banking Group has accused the bank of artificially inflating its profits by almost £1bn through the use of aggressive tax-avoidance schemes and exotic "Lehman- style" offshore deals which he said amounted to false accounting."
Well done that whistleblower (it's predictable, isn't it, that he lost his job last September "in a move he said was driven by the desire to silence a whistleblower." The same thing seems to have happened at Barclays, which has been accused of even more appallling acts of tax abuse.) There is so much important stuff in this story that we'd urge you to read it in full; one paragraph (among many important ones) that stands out is this:
"If the finance director wanted a new tax figure their staff worked to that figure and they delivered it too," he said. "The tail was wagging the dog in that the need to hit the bank's effective tax rate forecasts was driving the business."
In other words, in the financial services sector, accountants are simply free to make up how much tax they want to dodge, then find the way to do it. It reminds us of what John Lanchester told us about Rupert Murdoch's News Corporation in the London Review of Books:
"The company’s profits, declared in Australian dollars, were A$364,364,000 in 1987, A$464,464,000 in 1988, A$496,496,000 in 1989 and A$282,282,000 in 1990. The odds that such figures were a happy coincidence are 1,000,000,000,000 to one. That little grace note in the sums is accountant-speak for ‘Fuck you.’"
This is what accountants are doing, day in, day out: holding up two fingers (or one finger, depending on your culture) to our societies.
But it is in the financial sector where some of the most serious tax-dodging goes on: it is no wonder that research by TJN a year ago found that:
"As in the USA, the largest user of tax havens in every country surveyed was a bank."
(And yes, in Britain, the winner was Barcays.) The Government Accountability Office in the United States had earlier found a similar result, with Citigroup recording 427 offshore subsidiaries (News Corp. had 152.)
Given that corporations have so much leeway to decide how much to fleece taxpayers, it's still a wonder that corporate responsibility groups haven't picked up on the fact that taxpaying has to be front and centre of corporate responsiblity. Read more on that here.