Barclays\’ fine is not tax deductible

At least I think it isn\’t. Mr. Chakrabortty:

The £290m fine slapped on it by regulators is tax-deductible, making it equivalent to just 13 days\’ profit.

HMRC says that fines and penalties are not deductible:

A fine incurred as a result of a trader\’s infraction of the law is not allowable on the authority of CIR v Alexander von Glehn Ltd [1920] 12TC232, as it is not incurred wholly and exclusively for the purpose of the trade.

Now tax law is a lot more complex than I am going to find out with a quick Google. So could someone confirm this?

4 thoughts on “Barclays\’ fine is not tax deductible”

  1. Depends if it’s a negotiated settlement with the FSA (which could be deductible) or a criminal penalty imposed by the FSA (which probably wouldn’t be). Not sure from the press reports which category they’re in.

  2. Even if it is tax deductible (and I’d be surprised if it is), wouldn’t the state rather have 100% of the money instead of the 28% it would otherwise get under corporation tax?

  3. Regarding Bob Diamond and his payoff of £20m. Assuming that this is deferred income on which he has to pay 50% tax. Surely the country should be demanding that he be paid so that the state gets £10m.

  4. Fred, I agree (actually it would be 50% plus 2% employee’s NI, then the 13.8% employer’s NI).

    All these Leftists who scream for bankers’ boni to be taxed forget that they already are, and at more than the 28% the money would suffer if left as profit, as Christie correctly cites.

    Anyone would think that the Left view tax as less about revenue raising and more to do with social mis-engineering and kicking the bogey man du jour.

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