Foreign banks in Britain pay fraction of tax rate

London

SOME of the biggest foreign investment and commercial banks operating in Britain paid an average tax rate of just 6 per cent on the billions of dollars of profits they made in the country last year, a Reuters analysis of regulatory filings shows.

That is less than a third of Britain's corporate rate of 20 per cent. There is however nothing illegal about how they managed to reduce their taxes, and includes using losses built up during the financial crisis to offset current bills.

Seven of the biggest international banks operating in London - Europe's main investment banking centre - have published profit and tax data ahead of a year-end deadline stipulated by EU law.

Five of them, all US banks, reported a profit - a combined US$7.5 billion - and paid corporation tax, or corporate income t…