GOLDMAN SACHS’S latest annual accounts show it paid just £4.1m in corporation tax to the Treasury, in spite of making pre-tax profits of £1.9bn, reports The Independent.
The full tax bill handed to the Wall Street giant totalled £422.3m, but it deferred £418m – more than 99% of the amount – because of “timing differences”.
The move will be seen as a body blow to the chancellor, who is looking to make up the government’s deficit.
There is no suggestion that Goldman Sachs is attempting to avoid payment of the bill, but after it arose last year the Inland Revenue boss Dave Hartnett had “let off” the bank to the sum of £10m, the Manhattan-based firm has come under fire. Hartnett admitted that was “a mistake” and is retiring in the summer.
The bank’s UK tax liability varies every year as it is affected by the value of share options available to bankers, which fluctuate along with the stock market.
Takings dropped 31% to £3.19bn last year on the back the Eurozone crisis and “lower equity prices”. Profits rose, though, in part due to the “paper” value of share options paid to staff falling by more than £1.1bn, cutting the bank’s wage bill.
Labour MP John Mann, a member of the Commons Treasury select committee, said Goldman Sachs should not defer tax payments when it was able to pay now.
“It’s morally and ethically wrong. These are people who are at the heart of the problem in the financial world who’ve paid extraordinary bonuses to their partners and aren’t prepared to pay a fair amount of tax. It’s pure unadulterated greed.”
For its part, a spokesman for Goldman Sachs said: “The firm has set aside $684m [£422m] for tax, but has no discretion over the timing of actual tax paid in any one year, as this is determined by UK accounting and tax rules.”