Trust Bloomberg Tax's Premier International Tax offering for the news and guidance to navigate the complex tax treaty networks and business regulations.
By Hamza Ali
Barclays has seen its effective tax rate increase by a third, to 44.4 percent, during the first half of the year, due to increased penalties, fines and legal fees, the company announced Aug. 2 in its latest earnings report.
The U.K.-headquartered bank added 11.2 percentage points to its 2017 effective tax rate, partly due to the higher litigation and conduct fines that can’t be written off as losses for tax purposes, according to the bank.
Barclays’ effective tax rate, or the amount of tax it will pay after exemptions, has been an unexpected casualty in a year that has seen the bank pay $2 billion to settle a U.S. Justice department legal battle over whether it improperly sold mortgage-backed securities that fueled the financial crisis in 2007.
Meanwhile, these unscheduled charges and legal fees meant pretax profit at the high street bank also fell 35 percent, to 1.66 billion pounds ($2.2 billion) from 2.3 billion pounds. Profit before tax without the charges would stand at 3.7 billion pounds.
“It was the first quarter for some time with no significant litigation or conduct charges, restructuring costs, or other exceptional expenses which hit our profitability,” said Barclays CEO Jeff Staley in a statement.
“This first half performance shows a bank beginning to demonstrate its true potential and value,” he said. “The numbers we have posted strengthen our confidence that Barclays can deliver attractive and sustainable profits, and in our ability to return a greater proportion of those profits to shareholders over time.”
To contact the reporter on this story: Hamza Ali at firstname.lastname@example.org
To contact the editor responsible for this story: Penny Sukhraj at email@example.com
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)