Barclay Tax Woes

Barclays PLC has revealed that it is facing up to 500 million pounds, in taxes from the British Treasury resulting from tax evasive methods. The bank insists that it was using these “tax-efficient” loopholes in good faith and that they complied with the British tax code.

The U.K Treasury said that Barclay used two “highly abusive” methods to reduce its tax bill. The first method involved buying back debt at less than face value to avoid taxes on profits. The second method involved generating tax credits on income even though no tax had been paid in the first place.

The British government is now seeking more than half a billion pounds, or $800 million, to cover for the unpaid taxes. The bank, however, believes that this will not affect its profits materially, nor will it require amendment to its preliminary results released on February 10.