Bob Diamond, the chief executive of Barclays, has said in a letter to Chuka Umunna MP that his company paid £113 million in corporation tax on profits of £11.6 billion in 2009. Mr Diamond's letter came as a response to pressure by the MP who is a member of the Treasury Select Committee (TSC).
The amount of tax they paid was therefore barely 1% of the profit when the corporation tax rate for a company of their size is 28%
Now, before everyone hyperventilates, sharpens their knives and prepares the nooses let's see if they actually did anything wrong.
The company claim they have made significant losses during the bad times of the credit crunch, this allows them to bring those losses forward into later tax periods so reducing the tax they pay. This is normal practice, in fact the only real fault appears to be the way in which this is being portrayed to the public by many in the press.
Some of the press are portraying this as Bob Diamond being 'forced' to admit some sort of shady tax operations. In reality I suspect that Mr Diamond knows full well how the left and the press will exploit this (non) story to the full, knowing that most people do not know how corporation tax works and will believe everything at face value as presented to them.
What should be worrying people more is that there are going to be many, many companies quite legitimately carrying their losses forward. That inevitably means less money for the treasury coffers tomorrow. That means someone else has to cough up until the losses have been used up.
There is also the matter of Chuka Umunna MP. The Labour MP for Streatham said that it was 'shocking' that Barclays had paid so little. "This revelation underlines the government's failure to take the robust action needed to make sure that the banks which caused the crash pay their fair share, and will stick in the stomachs of small businesses struggling to borrow and ordinary people feeling the pinch of the government's austerity measures," he said.
This is just populist grandstanding by the MP. Either that or a lack of knowledge that someone who sits on the TSC should have. He is also a solicitor by profession.
Don't get me wrong, Barclays are by no means perfect. Although they took no UK bail-out they did receive money in the form of US$ from the Fed's TARP scheme. They may also have participated in the big banking gambles that have blighted us all.
But let's bash banks for the things they need bashing for. Not for conducting their business in a legal and proper way just because we don't like the figures they produce. And shame on many in even the broadsheet press for jumping on this bandwagon.