«Breaking News» Major bank demands its name be kept a secret in case to claw back tax on bankers bonus

Zahra Al-Rikabi, an attorney for the mystery bank, said: 'We don't want anyone to know we paid this tax because we don't want anyone to know we were paying bonuses'

A bank has gone to court to hide the fact it paid bonuses to staff, in a move described as 'astonishing' by a judge.

The bank is bidding to keep its name out of a lawsuit brought by Credit Suisse to challenge a windfall 50 per cent bankers' tax levied in the wake of the 2008 crisis that raised £3.4 billion.

Credit Suisse believes that other banks paid significantly less than it did and that six banks escaped the tax.

It wants to see HMRC documents that would show how much each of the banks paid, and which paid nothing or paid less than would be expected. The disclosures may then become public.

However, Zahra Al-Rikabi, a lawyer for the bank that wants to keep its name secret, told a court: 'We don't want anyone to know we paid this tax because we don't want anyone to know we were paying bonuses.'   

Judge Matthew Marsh responded 'Is that a serious submission?'. 

Al-Rikabi confirmed that it was and acknowledged that it was 'odd'.

The Credit Suisse lawsuit is bidding to recoup money paid under a levy that raised some £3.4 billion

The Credit Suisse lawsuit could reveal new details about events at the height of the financial crisis and refocus attention on bankers' pay by revealing details of how much each bank paid under the levy.

Judge Marsh gave Al-Rikabi 48 hours to make a formal application to have the bank's name hidden from court documents.

However, even Credit Suisse does not know the name of the bank, the Swiss bank's attorney Aidan Robertson said in court.

Some have already objected to bonus figures being released, George Peretz, HMRC's lawyer, told the court.

'The events of 2008 to 2009 remain a matter of deep public controversy,' he said.

Judge Marsh said his 'judicial eyebrows were raised' by the claims that details of taxes paid almost ten years ago could be 'somehow confidential and revelatory' - potentially undermining the unnamed bank's case.  

Judge Marsh asked attorney Robertson during the hearing whether his bid for documents was a 'fishing expedition'. Robertson said it was not and that his clients needed to know how much other banks paid under the tax in order to present its case in a trial scheduled for next year.   

Marsh told HMRC to give banks a deadline of December 17 to raise any objections to a redacted form of a spreadsheet held by the tax authority, containing some details of banks' payments of the tax, being disclosed. They'll get the opportunity to object in court if they want to, he said.

The tax authority had argued that such details should be disclosed confidentially, or with banks' names anonymised, because taxpayer confidentiality is 'critical to the operation of the tax system.'

Alistair Darling's 50% super-tax which hit bankers' bonuses in 2009 and raked in hundreds of millions for the Government

Windfall taxes have been used to prevent private firms and individuals making 'excess profits'.

In 2009, then Chancellor Alistair Darling announced he was levying a one-off super-tax to prevent banks walking away rich, just months after the 2008 financial crisis. 

The controversial 50% tax, paid by the bank rather than the employee, was introduced for bonuses above £25,000.

Initially, Mr Darling anticipated a £550m windfall from the bank bonus tax – but that was surpassed by just four banks.

HSBC was due to pay out £232m while part-nationalised Royal Bank of Scotland's bill was £208m and Barclays was told to pay a £225m bill.

However, some unnamed banks paid the bumper sums outside of the timeframe imposed by the Labour government, December 2009 – April 2010, meaning they avoided it on some bonuses.

Alistair Darling hit bankers with a huge tax in 2009 after the chaos of the financial crisis

Mr Darling said his aim was to force a 'permanent culture shift' in the City.

Now, Credit Suisse is bidding to reclaim some of the £3.4bn bill it contributed towards.

In the past, Windfall taxes have been used to claim millions from utilities firms including BAA, British Gas, British Telecom and Powergen, in the past.

In the UK, the precedent was set in 1997 when the government imposed a windfall tax on energy utility companies which had been privatised in the early 1980s.

They had walked away with huge profits which the Blair government argued should be shared with their customers.

While they are largely credited to the Labour government, were used by the Tories in all but name.

In 1981, the Conservative chancellor Geoffrey Howe introduced a special budget levy to harvest around £400m from the banks, which were seen to be escaping the pain of that recession.

The move creamed off 2.5% of the banks' non-interest bearing current account deposits.

     

Linkhienalouca.com

https://hienalouca.com/2018/11/28/major-bank-demands-its-name-be-kept-a-secret-in-case-to-claw-back-tax-on-bankers-bonus/
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Zahra Al-Rikabi, an attorney for the mystery bank, said: ‘We don’t want anyone to know we paid this tax because we don’t want anyone to know we were paying bonuses’

A bank has gone to court to hide the fact it paid bonuses to staff, in a move described as...

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