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Code ensures banks pay ‘fair share’

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The top 15 banks operating in the UK have now adopted the Code of Practice on Taxation for Banks, the Chancellor announced. ‘Alongside the Bank Levy, this shows that the Coalition Government is taking action to ensure banks pay their fair share,’ George Osborne said.

The Treasury said last year that it expected all banks operating in the UK to adopt the code, but by 17 October 2010 only four of the top 15 had done so. The Treasury asked HMRC to ‘ensure that all the major banks signed up’ by the end of November, although HMRC had said in its response to consultation 12 months ago that ‘the Code is voluntary’.

The Code states that banks should have strong governance around tax, which is integrated into their business decision making.

‘They should follow the spirit of the law in addition to the letter – this means banks can undertake tax planning to support their business operations, but this should not be used to achieve tax results that are contrary to the intentions of Parliament,’ the Treasury said. See

HMRC has updated a technical note on the Bank Levy, including draft legislation and guidance on collection and management of the Levy, ahead of the publication of ‘final draft’ legislation later this month.