Further anger towards the banks has been provoked by the admission by Lloyds Banking Group that they won’t pay corporation tax until their profits hit £15bn. This is made possible by the bank being able to write off deferred losses against the bank’s profits. Although there is a time limit to defer the losses, it will be at least three years before the bank, which is partly owned by the state, has to pay corporation tax.
This news follows the announcement by Barclays bank, that they had only paid £113m in 2009, although they had made £11.6bn. Again, the bank wrote off losses in order to reduce its tax bill in the United Kingdom. The former Liberal Democrat treasury spokesman, Lord Oakeshott, criticised the actions of Lloyds bank, stating that taxpayers have to pay more tax as a result of the bank’s paying less.
Lloyds have announced a profit before tax of £2.2bn for 2010, but won’t pay corporation tax as they have losses on their balance sheet which will be set against the profits. Royal Bank of Scotland has also declared a loss of £1.1bn for 2010, as they have deferred tax assets that can be written off against future tax liabilities.
Limited company taxation is complicated and to make sure that you are only paying the tax that you should, a small business accountancy or online accountants will deal with the company taxation for you. Outsourcing your administration will ensure that you maximise revenue, while staying within the relevant legislation.
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