Barclays in £500m hit on 'abusive' tax schemes
The Treasury has closed two tax loopholes after Barclays tried to avoid paying more than £500m in "highly abusive" dodges.
It is the first time the current Government has clawed back revenues retrospectively and the changes will ensure billions of pounds of tax are paid in future.
The move will embarrass Barclays because it has signed up to a code of practice against tax avoidance and has stressed the importance of good citizenship.
Barclays said it flagged up the schemes to HMRC "in a spirit of full transparency" and insisted it always operates within the law.
But the Government decided the schemes, while legal, were in breach of a code of practice that has seen all the major banks pledge to pay a fair share of taxes.
One of the tax schemes involved Barclays avoid paying corporation tax on profits it made buying back its own IOU-notes.
The other scheme - believed to be devised by Barclays - saw investment funds trying to receive tax credits from the Treasury on non-taxable income.
The Government brought in legislation yesterday to block future use of the scheme.