A giant Swiss bank which is threatening to move hundreds of jobs from the City is paying just 6p tax for every £1 profit from UK investment arms, the Mail can reveal.
UBS has repeatedly warned it will move staff to the Continent in the wake of the EU referendum.
Yesterday, chairman Axel Weber claimed 1,500 jobs would shift from London to preserve its business on mainland Europe.
A giant Swiss bank which is threatening to move hundreds of jobs from the City is paying just 6p tax for every £1 profit from UK investment arms, the Mail can reveal
Pro-European Union campaigners have repeatedly demanded that the Government heeds the City’s warnings over the threat of Brexit, citing the £71.4 billion contribution financial firms make to the exchequer.
But many foreign banks reduce their taxes by offsetting profits against debt repayments and previous losses.
UBS does not disclose full details of its UK tax bill, but has had to reveal figures for one part of its British business in official EU documents.
In 2014 and 2015, this division made £350.1 million profit in Britain, these records show, paying £21.6 million tax – 6p for every pound of profit.
UBS has repeatedly warned it will move staff to the Continent in the wake of the EU referendum
The bank said 400 of its 5,500 staff in London work in this division, and claimed that its overall contribution is likely to be much higher.
However, the bank will not release this figure or say what percentage of its overall UK profits was paid as tax.
Corporation tax is 20 per cent and from the start of last year, banks were charged an extra 8 per cent.
It is understood taxes targeted at banks cost UBS £100 million in 2016. The lender has already faced flak for its tax affairs. Last year, it was revealed it helped highly paid staff limit liabilities.
It lost a legal challenge brought by HMRC over an offshore scheme which saw 426 staff try to wriggle out of paying £36.9 million of tax and £12.7 million in National Insurance on £92 million of bonuses.
The 2003-4 scheme was described by the Supreme Court as having ‘no business or commercial rationale beyond tax avoidance’.
Activists said there were questions over UBS’s tax payments. Labour MP and Treasury Select Committee member John Mann said: ‘UBS is in no position to lecture on the UK economy, having avoided paying tax on bankers’ bonuses.
The UK loses billions to tax avoidance and our economy would be in a far better state if companies like UBS did the right thing.’ David Hillman of the Robin Hood Tax campaign said: ‘It is disgraceful UBS have made such huge profits but got away with paying so little in tax on them.’
A string of banks warned they would shift jobs abroad before the Brexit vote but many have backtracked or fallen silent, though UBS has continued to loudly warn of its plans.
Speaking at a finance conference in Frankfurt yesterday, Axel Weber said up to 1,500 employees would move to a ‘country that will be a long-term EU member’.
He said: ‘Institutions like ours are faced with very important decisions about how to reshape our operations, given London will no longer be part of the EU.’
UBS saw profits nearly halve to £2.7 billion last year, down from £5.1 billion in 2015. Its 47,600 staff saw their bonus pool cut by 17 per cent to £2.4 billion.
Even chief executive Sergio Ermotti took a £500,000 pay cut – although he still pocketed £11.1 million. UBS declined to comment on the tax figures.