Seven of the biggest investment banks operating in London used tax breaks and tax losses generated during the banking crisis to reduce their tax liability in 2014. The banks included JP Morgan, Bank of America Merrill Lynch, Deutsche Bank AG, Nomura Holding, Morgan Stanley, Goldman Sachs and UBS AG.
The banks paid little or no tax in the country despite reporting billions of dollars in sales and profits, it was revealed through a Reuters investigation. Combined, the banks with a total workforce of 33,000, earned revenues of $31bn (£20.9bn, €28.4bn) and raked in $5.3bn in profits from the UK in 2014. However, the total corporation tax they paid for the period was a meagre $31m or 0.001% of their revenues.
The findings are derived from the banks' filings which have become available after a 2013 change to the European Union rules that made it mandatory for banks to publish country-by-country profit and tax breakdowns.
The filings also revealed that while some banks did not pay taxes because they reported losses in London, a few reported profits in smaller regions that had a lower tax jurisdiction.
In recent years, the general public has shown anger towards companies like Starbucks and Google which reported that they were shifting profits out of Britain to avoid tax. The British government said following the public outcry, it was leading international efforts to make sure that corporations paid their fair share of tax.
Tax campaigners and MPs concurred by saying that it was wrong that banks could operate almost tax-free even after they received a lot of support during the crisis.
Labour MP John Mann said: "The tax receipts from these large financial institutions show what a charade their claim to pay their fair share has become. They rely on the taxpayer to underwrite their risk, yet they pay a minimal return back to the exchequer."
Both, the finance ministry and Her Majesty's Revenue and Customers, declined to comment on the matter, citing taxpayer confidentiality.