One hell of a shocker - "Bank of America now looks likely is beginning to book business previously conducted in Dublin – where corporation tax is 12% – through London. The UK is cutting its corporation tax to 21% by April 2014".
Of course not all that simple ...
"
Bank of America is routing billions of pounds of complex financial transactions through London rather than Dublin in a move that could reduce the bank's tax bill.
The bank bought Merrill Lynch in the days after Lehman Brothers collapsed in September 2008, by which it time had emerged that Merrill had booked £13bn of losses on investments that turned toxic during the UK credit crunch.
These losses can be carried forward and help companies reduce their corporation tax bills.
The enlarged Bank of America now looks likely to benefit from these deferred tax assets as it is beginning to book business previously conducted in Dublin – where corporation tax is 12% – through London. The UK is cutting its corporation tax to 21% by April 2014 and the value of the tax assets from Merrill Lynch falls along with the phased-in cuts in corporation tax.
The arrangement is also thought to have been changed to appease Irish regulators who were said to be concerned about the potential liability for Irish taxpayers.
The decision does not involve moving any individuals as the physical trading of derivatives was conducted out of London."
Source: Bank of America makes derivatives switch from Dublin to London | Business | guardian.co.uk
So there you have it - profits will be booked in Ireland (and then using loopholes moved offshore so not even Ireland gets the tax) and highly profitable UK branch will book losses to offset real tax here.
What's not to like?
I sense a great disturbance in the Force, as if millions of taxpayers suddenly cried out in terror, and were suddenly silenced.
Of course not all that simple ...
"
Bank of America is routing billions of pounds of complex financial transactions through London rather than Dublin in a move that could reduce the bank's tax bill.
The bank bought Merrill Lynch in the days after Lehman Brothers collapsed in September 2008, by which it time had emerged that Merrill had booked £13bn of losses on investments that turned toxic during the UK credit crunch.
These losses can be carried forward and help companies reduce their corporation tax bills.
The enlarged Bank of America now looks likely to benefit from these deferred tax assets as it is beginning to book business previously conducted in Dublin – where corporation tax is 12% – through London. The UK is cutting its corporation tax to 21% by April 2014 and the value of the tax assets from Merrill Lynch falls along with the phased-in cuts in corporation tax.
The arrangement is also thought to have been changed to appease Irish regulators who were said to be concerned about the potential liability for Irish taxpayers.
The decision does not involve moving any individuals as the physical trading of derivatives was conducted out of London."
Source: Bank of America makes derivatives switch from Dublin to London | Business | guardian.co.uk
So there you have it - profits will be booked in Ireland (and then using loopholes moved offshore so not even Ireland gets the tax) and highly profitable UK branch will book losses to offset real tax here.
What's not to like?
I sense a great disturbance in the Force, as if millions of taxpayers suddenly cried out in terror, and were suddenly silenced.
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